Required information [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 $ 160,000 $ 400,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $360,000 debit $2,900 debit Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption. 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).
Required information [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 $ 160,000 $ 400,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $360,000 debit $2,900 debit Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption. 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).
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter17: Accounting For Notes And Interest
Section: Chapter Questions
Problem 4SEA: JOURNAL ENTRIES (NOTE RECEIVED, RENEWED, AND COLLECTED) Prepare general journal entries for the...
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
![Required information
[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
$ 160,000
$ 400,000
In addition, its unadjusted trial balance includes the following items.
Accounts receivable
Allowance for doubtful accounts
$360,000 debit
$ 2,900 debit
Required:
1. Prepare the adjusting entry to record bad debts under each separate assumption.
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).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F621663c7-0fe0-4c1b-bfdb-6a6ea60efc81%2Fd580e50d-cf3d-4b6c-a5f7-cab7089979fa%2F47aqih_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[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
$ 160,000
$ 400,000
In addition, its unadjusted trial balance includes the following items.
Accounts receivable
Allowance for doubtful accounts
$360,000 debit
$ 2,900 debit
Required:
1. Prepare the adjusting entry to record bad debts under each separate assumption.
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).
Transcribed Image Text:Journal entry worksheet
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A B
Bad debts are estimated to be 4% of credit sales.
с
Note: Enter debits before credits.
Date
December 31
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
>
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