Question
Required information [The following information applies to the questions displayed below.] At December 31, 2017, Hawke Company reports the following results for its calendar year.
Required information
[The following information applies to the questions displayed below.] At December 31, 2017, Hawke Company reports the following results for its calendar year.
| Cash sales | $ | 1,558,750 | |
| Credit sales | 2,963,000 | ||
In addition, its unadjusted trial balance includes the following items.
| Accounts receivable | $ | 897,789 | debit |
| Allowance for doubtful accounts | 29,350 | debit | |
Required: 1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions.
- 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.
Adjusting entries (all dated December 31, 2017).
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Financial Reporting and Analysis Using Financial Accounting Information
Authors: Charles H. Gibson
13th edition
1285401603, 1133188796, 9781285401607, 978-1133188797
