Question: Required information Problem 7-2A (Algo) Estimating and reporting bad debts LO P2, P3 Skip to question [The following information applies to the questions displayed below.]
Required information
Problem 7-2A (Algo) Estimating and reporting bad debts LO P2, P3
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[The following information applies to the questions displayed below.]
At December 31, Hawke Company reports the following results for its calendar year.
| Cash sales | $ 560,000 |
|---|---|
| Credit sales | $ 1,400,000 |
In addition, its unadjusted trial balance includes the following items.
| Accounts receivable | $ 756,000 | debit |
|---|---|---|
| Allowance for doubtful accounts | $ 7,600 | debit |
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:
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