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Accounting

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Chapter 7 Problems

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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 $ 1,412,210
Credit sales $ 3,177,000

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

Accounts receivable $ 962,631 debit
Allowance for doubtful accounts $ 22,440 debit

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

  1. Bad debts are estimated to be 3% of credit sales.
  2. Bad debts are estimated to be 2% of total sales.
  3. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible.

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View transaction list Journal entry worksheet 2 3 Bad debts are estimated to be 3% of credit sales. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal

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