es Required information Problem 7-2A Estimating and reporting bad debts LO P2, P3 [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 $1,903,560 $3,574,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable! $1,082,922 debit Allowance for doubtful accounts $ 25,990 debit Problem 7-2A Part 1 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 7% of year-end accounts receivable are uncollectible