At December 31, 2015, Hawke Company reports the following results for its calendar year:

Cash sales	$1,905,000
Create sale	$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

Required 

1. Prepare the adjusting entry for this company to recognize bad debts under each of the following index- pendent 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.

2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2015, balance sheet gave the facts in part 1a.
3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2015, balance sheet given the facts in part 1c.

Revelant knowledge 

 Bad debt is one that businesses incur when the credit that was previously granted to a client is determined to be not able to be collected and therefore classified as charge off. cost off. A bad debt situation is one that needs to be considered by any business that offers credit to their customers, since there is always the possibility that the payment will not be collected.