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Prepare the adjusting entry to record bad debts

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Reference no: EM132745016

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

Cash sales $1,219,730

Credit sales $2,893,000

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

Accounts receivable $876,579 debit

Allowance for doubtful accounts $27,110 debit

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

a. Bad debts are estimated to be 4% of credit sales.

b. Bad debts are estimated to be 3% of total sales.

c. An aging analysis estimates that 7% of year-end accounts receivable are uncollectible.

Reference no: EM132745016

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