Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

At December 31, 2017, Hawke Company reports the following results for its calendar year. Cash sales $ 1,538,350 Credit sales 3,190,000 In addition, its unadjusted

At December 31, 2017, Hawke Company reports the following results for its calendar year.

Cash sales $ 1,538,350
Credit sales 3,190,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable $ 966,570 debit
Allowance for doubtful accounts 27,660 debit

Required: 1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions.

  1. Bad debts are estimated to be 3% of credit sales.
  2. Bad debts are estimated to be 2% of total sales.
  3. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible.

Adjusting entries (all dated December 31, 2017).

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

At December 31, 2017, Hawke Company reports the following results for its calendar year.

Cash sales $ 1,538,350
Credit sales 3,190,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable $ 966,570 debit
Allowance for doubtful accounts

2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1a.

CURRENT ASSETS

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

At December 31, 2017, Hawke Company reports the following results for its calendar year.

Cash sales $ 1,538,350
Credit sales 3,190,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable $ 966,570 debit
Allowance for doubtful accounts 27,660 debit

3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1c.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions