Problem 9-3A Estimating and reporting bad debts LO P2

At December 31, 2013, Hawke Company reports the following results for its calendar year. Cash sales $2.118.630

Credit sales 3,830,000

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

Accounts receivable $1,160,490 debit

Allowance for doubtful accounts 27,240 debit

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 2% 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

adjusting entries (all December 31st ).

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.

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.