Problem 7-2A (Algo) 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$1,503,730

Credit sales$2,876,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable $871,428 debit

Allowance for doubtful accounts $28,310debit

Problem 7-2A (Algo) Part 1

Required:

1.Prepare the adjusting entry to record bad debts under each separate assumption.

1. Bad debts are estimated to be 3% of credit sales.
2. Bad debts are estimated to be 2% of total sales.
3. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible.

Adjusting entries (all dated December 31).(Do not round intermediate calculations.)

Journal entry wooksheet

1. Bad debts are estimated to be 3% of credit sales.
2. Bad debts are estimated to be 2% of total sales.
3. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible.

Problem 7-2A (Algo) 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$1,503,730

Credit sales$2,876,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable$871,428 debit

Allowance for doubtful accounts$28,310 debit

Problem 7-2A (Algo) Part 2

2.Bad debts are estimated to be 3% of credit sales.Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet.

Current Assets

Problem 7-2A (Algo) 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$1,503,730Credit

sales$2,876,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable$871,428 debit

Allowance for doubtful accounts$28,310 debit

Problem 7-2A (Algo) Part 3

3.An aging analysis estimates that 6% of year-end accounts receivable are uncollectible.Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet.(Do not round intermediate calculations.)

Current Assets

Problem 6-4A (Algo) Preparing a bank reconciliation and recording adjustments LO P3

[The following information applies to the questions displayed below.]

The following information is available to reconcile Branch Company's book balance of cash with its bank statement cash balance as of July 31.

1. On July 31, the company's Cash account has a $25,706 debit balance, but its July bank statement shows a $27,892 cash balance.
2. Check No. 3031 for $1,440, Check No. 3065 for $496, and Check No. 3069 for $2,208 are outstanding checks as of July 31.
3. Check No. 3056 for July rent expense was correctly written and drawn for $1,270 but was erroneously entered in the accounting records as $1,260.
4. The July bank statement shows the bank collected $7,500 cash on a note for Branch. Branch had not recorded this event before receiving the statement.
5. The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.
6. The July statement shows a $11 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.
7. Branch's July 31 daily cash receipts of $8,632 were placed in the bank's night depository on that date but do not appear on the July 31 bank statement.

Problem 6-4A (Algo) Part 1

Required:

1.Prepare the bank reconciliation for this company as of July 31.

Branch Company

Bank Reconciliation

July 31

Bank statement balance Book Balance

Add: Add:

Deduct: Deduct:

Adjusted Bank Balance Adjusted bank balance

Problem 6-4A (Algo) Preparing a bank reconciliation and recording adjustments LO P3

[The following information applies to the questions displayed below.]

The following information is available to reconcile Branch Company's book balance of cash with its bank statement cash balance as of July 31.

1. On July 31, the company's Cash account has a $25,706 debit balance, but its July bank statement shows a $27,892 cash balance.
2. Check No. 3031 for $1,440, Check No. 3065 for $496, and Check No. 3069 for $2,208 are outstanding checks as of July 31.
3. Check No. 3056 for July rent expense was correctly written and drawn for $1,270 but was erroneously entered in the accounting records as $1,260.
4. The July bank statement shows the bank collected $7,500 cash on a note for Branch. Branch had not recorded this event before receiving the statement.
5. The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.
6. The July statement shows a $11 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.
7. Branch's July 31 daily cash receipts of $8,632 were placed in the bank's night depository on that date but do not appear on the July 31 bank statement.

Problem 6-4A (Algo) Part 2

2.Prepare the journal entries necessary to make the company's book balance of cash equal to the reconciled cash balance as of July 31.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal Entry Worksheet

1. Record the adjusting entry required, if any, related to the July 31 cash balance.
2. Record the adjusting entry required, if any, related to the outstanding checks.
3. Record the adjusting entry required, if any, related to Check No. 3056.
4. Record the adjusting entry required, if any, for the collection of the note by bank for Branch.
5. Record the adjusting entry required, if any, related to the NSF check.
6. Record the adjusting entry required, if any, related to bank service charges.
7. Record the adjusting entry required, if any, related to the July 31 deposit.