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The following information applies to the questions displayed below.

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

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

Accounts receivable

Allowance for doubtful accounts

$$648,000$ debit

$$6,500$ debit

Required:

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

a$.$ Bad debts are estimated to be $3\%$ of credit sales.

b$.$ Bad debts are estimated to be $2\%$ of total sales.

c$.$ An aging analysis estimates that $5\%$ of year$-$end accounts receivable are uncollectible.

Adjusting entries $($all dated December $31).$

Journal entry worksheet

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

Note: Enter debits before credits.