2013年10月18日星期五

Accounting help Estimating and reporting bad debts?

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[The following information applies to the questions displayed below.]


At December 31, 2013, Hawke Company reports the following results for its calendar year.

Cash sales $ 1,905,000

Credit sales 5,682,000


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


Accounts receivable $ 1,270,100 debit

Allowance for doubtful accounts 16,580 debit

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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 1.5% of credit sales.

b. Bad debts are estimated to be 1% of total sales.

c. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.


Adjusting entries (all dated December 31, 2013).


Dec 31 DR Bad debts expense 85,230

CR Allowance for doubtful accounts 85,230


Dec 31 DR Bad debts expense 75,870

CR Allowance for doubtful accounts 75,870


Dec 31 DR Bad debts expense 80,085

CR Allowance for doubtful accounts 80,085

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2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2013, balance sheet given the facts in part 1a.


Current assets

Accounts Receivable .................. ??????

Less: Allowance for doubtful accounts ..... 68,650


3.Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2013, balance sheet given the facts in part 1c.


Accounts receivable ........ ?????

Less: Allowance for doubtful accounts...... 63,505

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So heres the thing. I have been looking at examples and every one that i saw had their "Less: Allowance for doubtful accounts" above their "Accounts Receivable". When i tried doing that on my hw (it's online) it marked it as wrong. It only allowed me to put the A/R first, the problem with that is when i enter in the "Less: Allowance for doubtful accounts" (before entering a/r) it calculates it to be -63,505 or -68,650. I've tried taking 1,270,100 and subtracting the allowance but it didn't work. For example the numbers i've tried on problem #3 were 1,206,569 & 1,333,605 none of them worked. The "Less: Allowance for doubtful accounts" on both problems are correct it's just the accounts receivable i'm having trouble with.


Please help i don't know what i'm doing wrong!
  • Additional Details
  • My homework actually tells me if the answers i'm inputting are right or wrong. It says that $85230. and $75,870 are correct answers

  • Accounting help Estimating and reporting bad debts?

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