| D, Horme Page-ACCT 205:01 | waiting for response fi × m.tpx A: December 31, 20

Question

| D, Horme Page-ACCT 205:01 | waiting for response fi × m.tpx A: December 31, 2015, Hawke Company reports the following results for its calender year Cash sales Credit sales $ 2,105,280 2,876,000 In addition, its unadjusted trial balance includes the following items $871,428 debit 28,170 debit Allowance for doubtful accounts 16.66 points Required 1. Prepare the adjusting entry for this company to recognize bad debts under each of the following ndependent assumptions a. Bad debts are estmated to be 3%ofcreat sales b. Bad debts are estimated to be 2% of total sales c. An aging analysis estmates that 6% of year-end accounts receivable are uncollectible Adjusting entries lall dated December 31, 2015) Journal entry worksheet Bad debts are estimated to be 3% of credit sales.

Explanation / Answer

SOLUTION

(A) Journal Entries-

(B)

(C)

S.No. Account titles and Explanation Debit ($) Credit ($) 1. Bad debts expense 86,280   Allowance for doubtful accounts 86,280 (To record estimated bad debts) ($2,876,000*3%) 2. Bad Debts Expense 99,626 Allowance for Doubtful Accounts 99,626 (To record estimated bad debts) [($2,105,280 + $2,876,000)*2%] 3. Bad debts expense 80,456 Allowance for doubtful accounts 80,456 (To record estimated bad debts) [($871,428*6%)+$28,170]

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