Requirea informationProblems 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 salesCredit salesIn addition, its unadjusted trial balance includes the following items.Accounts receivableAllowance for doubtful accounts$ 100,000$ 250,000Problems 7-2A (Algo) Part 1Required:1. Prepare the adjusting entry to record bad debts under each separate assumption.View transaction lista. Bad debts are estimated to be 4% of credit sales.b. Bad debts are estimated to be 3% of total sales.c. An aging analysis estimates that 4% of year-end accounts receivable are uncollectible.Adjusting entries (all dated December 31).Journal entry worksheet< ABс$225,000 debit$ 1,800 debitBad debts are estimated to be 4% of credit sales.>

Using percentage of sales method, the unadjusted balance in allowance account does not affect the…

Problems 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 $ 100,000 $ 250,000 In addition, its unadjusted trial balance includes the following items. $ 225,000 debit $ 1,800 debit Accounts receivable Allowance for doubtful accounts

Problems 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 $ 100,000 $ 250,000 In addition, its unadjusted trial balance includes the following items. $ 225,000 debit $ 1,800 debit Accounts receivable Allowance for doubtful accounts

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 7.2E: Allowance Method of Accounting for Bad Debtsâ€”Comparison of the Two Approaches Kandel Company had...

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Entries for bad debt expense under the direct write-off and allowance methods The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31: A. Journalize the transactions under the direct write-off method. B. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of 36,000 at the beginning of the year and the company uses the analysis of receivables method. Rustic Tables Company prepared the following aging schedule for its accounts receivable: C. How much higher (lower) would Rustic Tables net income have been under the direct write-off method than under the allowance method?
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