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At December 31, Hawke Company reports the following results for its calendar year. Cash sales $ 50,000 Credit sales $ 125,000 In addition, its unadjusted
At December 31, Hawke Company reports the following results for its calendar year.
Cash sales | $ 50,000 |
---|---|
Credit sales | $ 125,000 |
In addition, its unadjusted trial balance includes the following items.
Accounts receivable | $ 112,500 | debit |
---|---|---|
Allowance for doubtful accounts | $ 900 | debit |
Prepare the adjusting entry to record bad debts under each separate assumption.
- Bad debts are estimated to be 4% of credit sales.
- Bad debts are estimated to be 3% of total sales.
- An aging analysis estimates that 4% of year-end accounts receivable are uncollectible.
Adjusting entries (all dated December 31).
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