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Problem 7-2A Estimating and reporting bad debts LO P2, P3
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At December 31, Hawke Company reports the following results for its
calendar year.
Cash sales | $ | 1,266,330 | |
Credit sales | $ | 3,708,000 | |
In addition, its unadjusted trial balance includes the following
items.
Accounts receivable | $ | 1,123,524 | debit |
Allowance for doubtful accounts | $ | 16,940 | debit |
Problem 7-2A Part 1
Required:
1. Prepare the adjusting entry to record bad debts
under each separate assumption.
Problem 7-2A Estimating and reporting bad debts LO P2, P3
Skip to question
[The following information applies to the questions
displayed below.]
At December 31, Hawke Company reports the following results for its
calendar year.
Cash sales | $ | 1,266,330 | |
Credit sales | $ | 3,708,000 | |
In addition, its unadjusted trial balance includes the following
items.
Accounts receivable | $ | 1,123,524 | debit |
Allowance for doubtful accounts | $ | 16,940 | debit |
Problem 7-2A Part 2
2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1a.
|
my less allowance for doubtful accounts is wrong how do i calculate this
Req.1 Journal Entry:
No | Tran. | Account Name | Debit | Credit | |
---|---|---|---|---|---|
1 | a. | Bad debts expense | $148,320 | ||
Allowance for Doubtful accounts | $148,320 | ||||
(3,708,000 *4%) | |||||
b. | Bad debts expense | $149,230 | |||
Allowance for Doubtful accounts | $149,230 | ||||
(1,266,330 +3,708,000)*3% | |||||
c. | Bad debts expense | $95,587 | |||
Allowance for Doubtful accounts | $95,587 | ||||
(1,123,524*7%)+16940 |
Req .2 ( Part A)
Current Assets: | |||
Accounts receivable | 1,123,524 | ||
less:Allowance for doubtful accounts(148320-16940) | (131,380)9 | $ 992,144 |
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