Hitachi, Ltd., reports total revenues of ¥9,616,202 million for its fiscal year ending March 31, 2014; and its March 31, 2014, unadjusted trial balance reports a debit balance for trade receivables (gross) of ¥2,797,935 million.
a. Prepare the adjusting entry to record its bad debts expense assuming un-collectibles are estimated to be 0.4% of total revenues and its unadjusted trial balance reports a credit balance of ¥10,000 million for the allowance for doubtful accounts.
b. Prepare the adjusting entry to record bad debts expense assuming un-collectibles are estimated to be 2.0% of year-end trade receivables (gross) and its unadjusted trial balance reports a credit balance of ¥10,000 million for the allowance for doubtful accounts?