question 1

Required information 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 Credit sales $1,985,750 $3,330,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $1,008,990 debit $ 24,880 debit Problem 7-2A (Algo) Part 1 Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption 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 dated December 31). (Do not round intermediate calculations.) Journal entry worksheet An aging analysis estimates that 5% of year-end accounts receivable are uncollectible. Note: Enter debits before credits. Transaction General Journal Debit Credit C. Record entry Clear entry View general journal