Problem 7-2A Estimating and reporting bad debts LO P2, P3 [The following information...
80.2K
Verified Solution
Link Copied!
Question
Accounting
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
$
1,747,460
Credit sales
2,951,000
In addition, its unadjusted trial balance includes the following items.
Accounts receivable
$
894,153
debit
Allowance for doubtful accounts
13,640
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.
Bad debts are estimated to be 4% of credit sales.
Bad debts are estimated to be 3% of total sales.
An aging analysis estimates that 7% of year-end accounts receivable are uncollectible.
Adjusting entries (all dated December 31, 2017).
Problem 7-2A Part 2
2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1a.
Problem 7-2A Part 3
3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1c.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
