- Prepare the adjusting entry needed for Business Solutions to recognize bad debts expense on March 31, 2016, under each of the following independent assumptions (assume a zero unadjusted balance in the Allowance for Doubtful Accounts at March 31.
- Bad debts are estimated to be 1% of total revenues. (Round amount to the dollar)
- Bad debts are estimated to be 2% of accounts receivable. (Round amount to the dollar)
- Assume that Business Solutions’ Accounts Receivable balance at June 30 is $20,205 and that one account of $100 has been written off against the Allowance for Doubtful Accounts since March 31, 2016. If S. Rey uses the method prescribed in part 1b, what is the adjusting journal entry must be made to recognize bad debts expense on June 30, 2016?
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