Question

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

Cash sales: $1,905,000
Credit sales: $5,682,000
Accounts receivable: $1,270,100
Allowance for doubtful accounts: $16,580

What is the estimated percentage of accounts receivable that Hawke Company expects to be uncollectible?



(A) 1.3%
(B) 2.9%
(C) 3.6%
(D) 5.0%

Answer 1

To calculate the estimated percentage of accounts receivable that Hawke Company expects to be uncollectible, divide the allowance for doubtful accounts by the total accounts receivable. In this case, the estimated percentage is 1.3%.

Step-by-step explanation:

To calculate the estimated percentage of accounts receivable that Hawke Company expects to be uncollectible, we need to divide the allowance for doubtful accounts by the total accounts receivable. In this case, the allowance for doubtful accounts is $16,580 and the accounts receivable is $1,270,100.

Therefore, the estimated percentage of accounts receivable that Hawke Company expects to be uncollectible is calculated as:

(Allowance for doubtful accounts / Accounts receivable) * 100% = (16,580 / 1,270,100) * 100% = 1.306%

So the correct answer is (A) 1.3%.