Problem 7-3A Estimating and reporting bad debts LO P2

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

At December 31, 2013, Hawke Company reports the following results for its calendar-year.

Cash sales	$	2,080,470
Credit sales		2,919,000

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

Accounts receivable	$	884,457	debit
Allowance for doubtful accounts		11,210	debit

References

Section BreakProblem 7-3A Estimating and reporting bad debts LO P2

1.

value: 5.00 points

Required information

Problem 7-3A Part 1

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

Adjusting entries (all dated December 31, 2013).

References

eBook & Resources

WorksheetDifficulty: Hard

Problem 7-3A Part 1Learning Objective: 07-P2 Apply the allowance method and estimate uncollectibles based on sales and accounts receivable.

eBook: Estimating Bad Debts-Percent of Sales Method

Check my work

2.

value: 5.00 points

Required information

Problem 7-3A Part 2

2.	Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2013, balance sheet given the facts in part 1a.

References

eBook & Resources

WorksheetDifficulty: Hard

Problem 7-3A Part 2Learning Objective: 07-P2 Apply the allowance method and estimate uncollectibles based on sales and accounts receivable.

eBook: Estimating Bad DebtsPercent of Sales Method

Check my work

3.

value: 5.00 points

Required information

Problem 7-3A Part 3

3.	Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2013, balance sheet given the facts in part 1c.

References

eBook & Resources

WorksheetDifficulty: Hard

Problem 7-3A Part 3Learning Objective: 07-P2 Apply the allowance method and estimate uncollectibles based on sales and accounts receivable.

eBook: Estimating Bad DebtsPercent of Sales Method