Problem 7-2A (Algo) Estimating and reporting bad debts LO P2, P3 Skip to question [The following information applies to the questions displayed below.]

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

Cash sales $ 760,000

Credit sales $ 1,900,000

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

Accounts receivable $ 570,000 debit

Allowance for doubtful accounts $ 6,800 debit

Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption.

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

Adjusting entries (all dated December 31). Answer is complete but not entirely correct