Problems 7-2A (Algo) Estimating and reporting bad debts LO P2, P3 [The following information applies to the questions displayed below.] At December 31, Hawke Company reports the following results for its calendar year. Cash sales Credit sales $ 100,000 $ 250,000 In addition, its unadjusted trial balance includes the following items. $ 225,000 debit $ 1,800 debit Accounts receivable Allowance for doubtful accounts

FINANCIAL ACCOUNTING
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Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Problems 7-2A (Algo) Estimating and reporting bad debts LO P2, P3
[The following information applies to the questions displayed below.]
At December 31, Hawke Company reports the following results for its calendar year.
Cash sales
Credit sales
In addition, its unadjusted trial balance includes the following items.
Accounts receivable
Allowance for doubtful accounts
$ 100,000
$ 250,000
Problems 7-2A (Algo) Part 1
Required:
1. Prepare the adjusting entry to record bad debts under each separate assumption.
View transaction list
a. Bad debts are estimated to be 4% of credit sales.
b. Bad debts are estimated to be 3% of total sales.
c. An aging analysis estimates that 4% of year-end accounts receivable are uncollectible.
Adjusting entries (all dated December 31).
Journal entry worksheet
< A
B
с
$225,000 debit
$ 1,800 debit
Bad debts are estimated to be 4% of credit sales.
>
Transcribed Image Text:Requirea information Problems 7-2A (Algo) Estimating and reporting bad debts LO P2, P3 [The following information applies to the questions displayed below.] At December 31, Hawke Company reports the following results for its calendar year. Cash sales Credit sales In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $ 100,000 $ 250,000 Problems 7-2A (Algo) Part 1 Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption. View transaction list a. Bad debts are estimated to be 4% of credit sales. b. Bad debts are estimated to be 3% of total sales. c. An aging analysis estimates that 4% of year-end accounts receivable are uncollectible. Adjusting entries (all dated December 31). Journal entry worksheet < A B с $225,000 debit $ 1,800 debit Bad debts are estimated to be 4% of credit sales. >
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