Required information Problem 7-2A (Algo) 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 Credit sales $ 760,000 $ 1,900,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $ 570,000 debit $ 6,800 debit Problem 7-2A (Algo) Part 1 Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption. a. Bad debts are estimated to be 2% of credit sales. b. Bad debts are estimated to be 1% of total sales. c. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. Adjusting entries (all dated December 31). Journal entry worksheet Bad debts are estimated to be 2% of credit sales. Note: Enter debits before credits. Date General Journal Debit Credit December 31 Record entry Clear entry View general journal Journal entry worksheet Bad debts are estimated to be 1% of total sales. Note: Enter debits before credits. Date General Journal Debit Credit December 31 Record entry Clear entry View general journal Journal entry worksheet An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. Note: Enter debits before credits. Date General Journal Debit Credit December 31 Record entry Clear entry View general journal Required information Problem 7-2A (Algo) 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 Credit sales $ 760,000 $ 1,900,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $ 570,000 debit $ 6,800 debit Problem 7-2A (Algo) Part 2 2. Bad debts are estimated to be 2% of credit sales. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet. Current assets: ! Required information Problem 7-2A (Algo) 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 Credit sales $ 760,000 $ 1,900,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $ 570,000 debit $ 6,800 debit Problem 7-2A (Algo) Part 3 3. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet. Current assets
