Required:

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

1. Bad debts are estimated to be 4% of credit sales.
2. Bad debts are estimated to be 3% of total sales.
3. An aging analysis estimates that 7% of year-end accounts receivable are uncollectible.

Adjusting entries (all dated December 31).(Do not round intermediate calculations

Problem 7-2A Estimating and reporting bad debts LO P2, P3

[The following information applies to the questions displayed below.]

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

Cash sales$1,329,050Credit sales$2,980,000

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

Accounts receivable$902,940debitAllowance for doubtful accounts$11,270debit