Question

At December 31, 2017, 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

2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1a

Short answer

Answer

The amount of accounts receivables and the allowance for doubtful accounts will appear on the assets side of the organization’s balance sheet under the head of current assets.

Step-by-step solution

Step-by-Step SolutionStep 1: Meaning of Accounts Receivable

When a business entity sells goods on credit, and the amount is due from the customers to the business, that particular amount is termed as accounts receivables.

Indication of the amounts in balance sheet

Balance Sheet
Assets	Amount($)
Current assets
Accounts receivables	1,270,10
Less: Allowance for doubtful accounts	68,65
	1,204,450

Notes to accounts

$$\begin{gathered} Allowancefordoubtfulaccounts=Baddebtexpense-Debitbalanceforallowancefordoubtfulaccounts \\ =\$85,230-516,580 \\ =\$68,650 \end{gathered}$$