The foowing information appires to tie questions dispiayed Delow At December 31,

Question

The foowing information appires to tie questions dispiayed Delow At December 31, 2016, Hawke Company reports the following results for its calendar year Cash sales Credit sales $ 2161,810 3,290,000 In addition, its unadjusted trial balance includes the following items. S 996,870 debit 23,070 debit Allowance for doubtful accounts Required information 5.00 points Required 1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions a. Bad debts are estimated to be 4% of credit sales Bad debts are estimated to be 3% of total sales. C. An aging analysis estimates that 7% of year-end accounts receivable are uncollectible. Adjusting entries (all dated December 31, 2016). (Round your final answers to the nearest whole dollar.)

Explanation / Answer

1) Adjusting entry :

2) Calculate balance :

3) Calculate balance :

No accounts & explanation debit credit a Bad debt expense (3290000*4%) 131600     Allowance for doubtful accounts 131600 (To record adjusting entry) b Bad debt expense 163554    Allowance for doubtful accounts 163554 (To record adjusting entry) c Bad debt expense 46711    Allowance for doubtful accounts 46711 (To record adjusting entry)

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