At December 31, 2017, Hawke Company reports the following results for its calendar year. Cash sales Credit sales $1,738,920 2,812,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $852,036 debit 10,250 debit Problem 9-2A Part 1 Required: 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 3% of credit sales. b. Bad debts are estimated to be 2% of total sales. c. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. Adjusting entries (all dated December 31, 2017).
At December 31, 2017, Hawke Company reports the following results for its calendar year. Cash sales Credit sales $1,738,920 2,812,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $852,036 debit 10,250 debit Problem 9-2A Part 1 Required: 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 3% of credit sales. b. Bad debts are estimated to be 2% of total sales. c. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. Adjusting entries (all dated December 31, 2017).
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter7: Receivables And Investments
Section: Chapter Questions
Problem 7.1P: Allowance Method for Accounting for Bad Debts At the beginning of 2016, EZ Tech Companys Accounts...
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Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:At December 31, 2017, Hawke Company reports the following results for its calendar year.
Cash sales
Credit sales
$1,738,920
2,812,000
In addition, its unadjusted trial balance includes the following items.
Accounts receivable
$852,036 debit
10,250 debit
Allowance for doubtful accounts
Problem 9-2A Part 1
Required:
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 3% of credit sales.
b. Bad debts are estimated to be 2% of total sales.
C. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible.
Adjusting entries (all dated December 31, 2017).
View transaction list
Journal entry worksheet
1.
2.
3
Bad debts are estimated to be 3% of credit sales.
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