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Required information Problem 7-2A 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 $1,626,500 Credit sales $3,819,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $1,157,157 debit Allowance for doubtful accounts $ 19,750 debit A Problem 7-2A Part 1 Required: 1. 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 6% of yearend accounts receivable are uncollectible. Adjusting entries (all dated December 31). (Do not round intermediate calculations.) View transaction list Journal entry worksheet Bad debts are estimated to be 3% of credit sales. Note: Enter debits before credits. Record entry Clear entry View general journal View transaction list Journal entry worksheet Bad debts are estimated to be 2% of total sales. Note: Enter debits before credits. Clear entry View general journal View transaction list Journal entry worksheet An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. Note: Enter debits before credits. Record entry Clear entry View general journal Required information Problem 7-2A 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 $1,626,500 Credit sales $3 , 819 , 000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 1 , 157 , 157 debit Allowance for doubtful accounts 5 19,750 debit \\. 4 Problem 7-2A Part 3 3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1c. (Do not round intermediate calculations.) Current assets: _ Accounts receivable _ ess: Allowance for doubtful accounts _ $ Exercise 8-13 Revising depreciation LO CZ Apex Fitness Club uses straight-line depreciation for a machine costing $29,700, with an estimated four-year life and a $2,500 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,050 salvage value. Required: 1. Compute the machine's book value at the end of its second year. 2. Compute the amount of depreciation for each of the nal three years given the revised estimates. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Cost Accumulated depreciation 2 years Book value at point of revision $ 0 Required 2 > Exercise 8-13 Revising depreciation L0 (:2 Apex Fitness Club uses straight-line depreciation for a machine costing $29,700, with an estimated four-year life and a $2,500 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,050 salvage value. Required: 1. Compute the machine's book value at the end of its second year. 2. Compute the amount of depreciation for each of the nal three years given the revised estimates. Complete this question by entering your answers in the tabs below. Required 1 : Required2 Compute the amount of depreciation for each of the nal three years given the revised estimates. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Book value at point of revision Revised salvage value Remaining depreciable cost Years of life remaining Revised annual depreciation years 3-5
