At December 31, Hawke Company reports the following results for its calendar year Cash sales Credit sales $400,000 In addition, its unadjusted trial balance includes the following items Accounts receivable Allowance for doubtful accounts 5 900,000 debit $ 7,200 debit Problem 7-2A (Algo) Part 3 3. An aging analysis estimates that 4% of year-end accounts receivable are uncollectible. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet Cumentat Less Alowance for doubt account

At December 31, Hawke Company reports the following results for its calendar year Cash sales Credit sales $400,000 In addition, its unadjusted trial balance includes the following items Accounts receivable Allowance for doubtful accounts 5 900,000 debit $ 7,200 debit Problem 7-2A (Algo) Part 3 3. An aging analysis estimates that 4% of year-end accounts receivable are uncollectible. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet Cumentat Less Alowance for doubt account

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Innovative Tech Inc. (ITI) has been using the percentage of credit sales method to estimate bad debts. During November, ITI sold services on account for $130,000 and estimated that 3/4 of 1 percent of those sales would be uncollectible. Required: 1. Prepare the November adjusting entry for bad debts. 2. Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $89,900, aged as follows: (1) 1–30 days old, $74,000; (2) 31–90 days old, $12,000; and (3) more than 90 days old, $3,900. The average rate of uncollectibility for each age group is estimated to be (1) 12 percent, (2) 24 percent, and (3) 48 percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. 3. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,550 credit balance at December 31. Prepare the December 31 adjusting entry. 4. Show how the various accounts…
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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 $ 320,000 Credit sales $ 800,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 432,000 debit Allowance for doubtful accounts $ 4,300 debit 3. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet.
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