Required information

[The following information applies to the questions displayed below.] At December 31, 2018, Hawke Company reports the following results for its calendar year.

Cash sales	$	2,019,550
Credit sales		3,798,000

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

Accounts receivable	$	1,150,794	debit
Allowance for doubtful accounts		16,490	debit

Required: 1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions.

1. Bad debts are estimated to be 3% of credit sales. (Round your final answers to the nearest whole dollar.)
2. Bad debts are estimated to be 2% of total sales.
3. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. (Round your final answers to the nearest whole dollar.)

Adjusting entries (all dated December 31, 2018).

Journal entry worksheet

• Bad debts are estimated to be 3% of credit sales.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
a.

Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2018, balance sheet assuming that bad debts are estimated to be 3% of credit sales.

Current assets:

Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2018, balance sheet assuming that an aging analysis estimates that 6% of year-end accounts receivable are uncollectible

Current assets: