$[$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

$$40,000$

$$1,000,00$

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

Accounts receivable

Allowance for doubtful accounts

$ $300,000$ debit

$ $3,600$ debit

Requlred:

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

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

A

B

C

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

Note Enter delics betore chents.

Date

General Journal

Debit

Credit