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Required information Problem 7-2A (Algo) Estimating and reporting bad debts LO P2, P3 Skip to...

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Accounting

Required information

Problem 7-2A (Algo) Estimating and reporting bad debts LO P2, P3

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[The following information applies to the questions displayed below.]

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

Cash sales $ 560,000
Credit sales $ 1,400,000

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

Accounts receivable $ 756,000 debit
Allowance for doubtful accounts $ 7,600 debit

2. Bad debts are estimated to be 3% of credit sales. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet.

Current assets:

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