Problem 7-2A Estimating and reporting bad debts OP2 P30 At December 31, Hawke Company reports the following results for its calendar year. Cash sales $1,905,000 5,682,000 Credit sales In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $1,270,100 debit 16,580 debit Required 1. Prepare the adjusting entry to record bad debts under each separate assumption. a. Bad debts are estimated to be 1.5% of credit sales. b. Bad debts are estimated to be 1% of total sales. C. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible. Check Bad Debts Expense: (1a) $85,230, (1c) $80,085 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1a. 3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1c