Question

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

Cash sales	$	1,905,000
Credit sales	$	5,682,000

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

Accounts receivable	$	1,270,100	debit
Allowance for doubtful accounts	$	16,580	debit

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

1. Bad debts are estimated to be 1.5% of credit sales.
2. Bad debts are estimated to be 1% of total sales.
3. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.
   

Adjusting entries (all dated December 31).

Answer 1

answered by: anonymous