Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below] At December 31, 2017, Hawke Company reports the following results for its calendar year. Cash sales Credit sales3,744,000 $1,955,500 In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $1,134,432 debit 25,080 debit 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1a Current assets: Accounts receivable $ 1,134,432 s: Allowance for doubtful accounts $ 1,134,432

Explanation / Answer

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Unadjusted balance = 25080 Debit

Estimated balance ($1134432 × 7%) = 79410.24 Credit

Required adjustment = 104490.24 Credit

2)

Expense is 4% of credit sales: 149760

Transaction Genetal Jouranl Debit Credit a. Bad debts expense 149760 Allowance for doubtful accounts 149760 ( 3744000 * 0.04) b Bad debts expense 170985 Allowance for doubtful accounts 170985 ( 5699500 * 0.03) c Bad debts expense 104490 Allowance for doubtful accounts 104490

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