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Required Prepare journal entries to record these transactions and events. Problem 7-2A Estimating and...

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Accounting

Required
Prepare journal entries to record these transactions and events.
Problem 7-2A Estimating and reporting bad debts P2 P3
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
Prepare the adjusting entry to record bad debts under each separate assumption.
a. Bad debts are estimated to be 1.5% of credit sales.
b. Bad debts are estimated to be 1% of total sales.
c. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.
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