Class project $2$

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$3$

Santana Rey, owner of Business Solutions, realizes that she needs to begin accounting for bad debts expense. Assume that Business Solutions has total revenues of $$44,000$ during the first three months of $2022$ and that the Accounts Receivable balance on March $31,2022,$ is $$22,867.$

Required:

$10.$ Prepare the adjusting entry to record bad debts expense, which are estimated to be $1\%$ of total revenues on March $31,2022.$ There is a zero unadjusted balance in the Allowance for Doubtful Accounts at March $31.$

$1$b$.$ Prepare the adjusting entry to record bad debts expense, which are estimated to be $2\%$ of accounts receivable on March $31,2022.$ There is a zero unadjusted balance in the Allowance for Doubtful Accounts at March $31.$

$2.$ Assume that Business Solutions's Accounts Receivable balance at June $30,2022,$ is $$20,250$ and that one account of $$100$ has been written off against the Allowance for Doubtful Accounts since March $31,2022.$ If Rey uses the method in part $1b,$ what adjusting journal entry is made to recognize bad debts expense on June $30,2022?$

Complete this question by entering your answers in the tabs below.

Req $2$

Prepare the adjusting entry to record bad debts expense, which are estimated to be $1\%$ of total revenues on March $31,2022.$ There is a zero unadjusted balance in the Allowance for Doubtful Accounts at March $31.$

Journal entry worksheet

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Record estimated bad debts.

Note: Enter debits before credits.

$\backslash$table$[[$S$.$No$/$Date$,$Account Title,Debit,Credit$],[$March $31,,,],[,,,],[,,,],[,,,],[,,,],[,,,]]$

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