Required information

Problem 7-2A Estimating and reporting bad debts LO P2, P3

[The following information applies to the questions displayed below.] At December 31, 2017, Hawke Company reports the following results for its calendar year.

Cash sales	$	2,193,290
Credit sales		3,239,000

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

Accounts receivable	$	981,417	debit
Allowance for doubtful accounts		10,900	debit

Problem 7-2A Part 1

Required: 1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions.

1. Bad debts are estimated to be 2% of credit sales.
2. Bad debts are estimated to be 1% of total sales.
3. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.

Adjusting entries (all dated December 31, 2017).