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 $ 400,000 $ 1,000,000 In addition, its unadjusted trial balance includes the following items. $ 300,000 debit $3,600 debit Accounts receivable Allowance for doubtful accounts Problem 7-2A (Algo) Part 2 2. Bad debts are estimated to be 2% of credit sales. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet. Current assets: Accounts receivable Less: Allowance for doubtful accounts $ 300,000 $ 294,000

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. In addition, its unadjusted trial balance includes the following items. Problem 7-2A (Algo) Part 2 2. Bad debts are estimated to be 2% of credit sales. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet