At December 31, 2017, Hawke Company reports the following results for its calend
ID: 2580622 • Letter: A
Question
At December 31, 2017, Hawke Company reports the following results for its calendar year. Cash sales $ 1,436,130 Credit sales 3,101,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 939,603 debit Allowance for doubtful accounts 21,540 debit
Required: 1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions. Bad debts are estimated to be 4% of credit sales. Bad debts are estimated to be 3% of total sales. An aging analysis estimates that 7% of year-end accounts receivable are uncollectible.
Explanation / Answer
Baddebts are estimated to be 4% of credit sales
Baddebts are estimated to be 3% of Total sales
Baddebts are estimated to be 7% of accounts receivable
in this case allowance for doubtful account balance showing a debit balance. so those balance also will add to get baddebt exepsnes for the year
Baddebt expenses ($3,101,000*4%) $ 124,040.00 Allowance for doubtful account $ 124,040.00Related Questions
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