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At December 31, Hawke Company reports the following results for its calendar year. Cash sales $ 1,887,420 Credit sales $ 3,393,000 In addition, its unadjusted
At December 31, Hawke Company reports the following results for its calendar year.
Cash sales | $ | 1,887,420 | |
Credit sales | $ | 3,393,000 | |
In addition, its unadjusted trial balance includes the following items.
Accounts receivable | $ | 1,028,079 | debit |
Allowance for doubtful accounts | $ | 14,210 | debit |
Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption.
- 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.
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