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At December 31, Hawke Company reports the following results for its calendar year.
Cash sales $ 1,314,190
Credit sales $ 2,868,000
In addition, its unadjusted trial balance includes the following items.
Accounts receivable $ 869,004 debit
Allowance for doubtful accounts $ 25,430 debit
Required:
1. Prepare the adjusting entry to record bad debts under each separate assumption.
Bad debts are estimated to be 2% of credit sales.
Bad debts are estimated to be 1% of total sales.
An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.
Adjusting entries (all dated December 31). (Do not round intermediate calculations.)
