Question
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.
- Bad debts are estimated to be 3% of credit sales.
- Bad debts are estimated to be 2% of total sales.
- 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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started