Question

Required information The following information applies to the questions displayed below.) At December 31, 2018, Hawke Company reports the following results for its calendar year. Cash sales Credit sales $2,030,630 3,080,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $933,240 debit 24,950 debit 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2018, balance sheet assuming that bad debts are estimated to be 3% of credit sales. Current assets:

Answer 1

current assets: Accounts receivable Less. Allowance for doubtful accounts $ 933,240 ($ 67,450) $ 865,790 Explanations Expense is 3% of credit sales to record estimated bad debits = $ 3,080,000 X 3% = $ 92,400 Adjustment to the allowance $92,400 credit unadjusted allowance balance $24,950 Debirt Adjusted balance $ 67,450 Credit