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TCO B) Adjusting Entries: Allowance for Doubtful Accounts madeon 1/1/1X was $70,000. The balance in the allowance account on12/31/1X after making the annual adjusting entry was $150,000 andduring 201X bad debts written off amounted to $60,000. You are toprovide the missing adjusting entry. For each journal entry writeDr. for debit and Cr. for credit.

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Hubert Koch
Hubert KochLv2
28 Sep 2019
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4. (TCO B) Adjusting Entries: When the accounts of ConstantineInc. are examined, the adjusting data listed below are uncovered onDecember 31, the end of annual fiscal period. The prepaid insuranceaccount shows a debit of $6,000, representing the cost of a 2-yearfir insurance policy dated August 1 of the current year. OnNovember 1, Rental Revenue was credited for $2,400, representingrevenue from a sub-rental for a 3-month period beginning on thatdate. Interest of $770 has accrued on notes payable. You are toprepare the missing adjusting entry. For each journal entry writeDr. for debit and Cr. for credit. (Points : 10)

Serial Problem Business Solutions LO P1, P2

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 $62,000 during the first three months of 2018, and that the Accounts Receivable balance on March 31, 2018, is $22,767.

Required:
1a. Prepare the adjusting entry needed for Business Solutions to recognize bad debts expense, which are estimated to be 1% of total revenues on March 31, 2018 (assume a zero unadjusted balance in the Allowance for Doubtful Accounts at March 31).
1b. Prepare the adjusting entry needed for Business Solutions to recognize bad debts expense, which are estimated to be 2% of accounts receivable on March 31, 2018 (assume a zero unadjusted balance in the Allowance for Doubtful Accounts at March 31).
2. Assume that Business Solutions' Accounts Receivable balance at June 30, 2018, is $20,850 and that one account of $99 has been written off against the Allowance for Doubtful Accounts since March 31, 2018. If S. Rey uses the method prescribed in part 1b, what adjusting journal entry must be made to recognize bad debts expense on June 30, 2018?

Req 1A

Prepare the adjusting entry needed for Business Solutions to recognize bad debts expense, which are estimated to be 1% of total revenues on March 31, 2018 (assume a zero unadjusted balance in the Allowance for Doubtful Accounts at March 31).

Journal entry worksheet

Record estimated bad debts.

Req 1B

Prepare the adjusting entry needed for Business Solutions to recognize bad debts expense, which are estimated to be 2% of accounts receivable on March 31, 2018 (assume a zero unadjusted balance in the Allowance for Doubtful Accounts at March 31).

Journal entry worksheet

Record estimated bad debts.

Req 2

Assume that Business Solutions' Accounts Receivable balance at June 30, 2018, is $20,850 and that one account of $99 has been written off against the Allowance for Doubtful Accounts since March 31, 2018. If S. Rey uses the method prescribed in part 1b, what adjusting journal entry must be made to recognize bad debts expense on June 30, 2018?

Journal entry worksheet

Record the estimated bad debts.

The ledger of Sairu Company at the end of the current year shows Accounts Receivable $195,000, Sales Revenue $1,800,000, and Sales Returns and Allowances $60,000.

Instructions:

(a) If Sairu uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Sairu determines that Mashfi's $2,500 balance is uncollectible.

(b) If Allowance for Doubtful Accounts has a credit balance of $3,500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable.

(c) If Allowance for Doubtful Accounts has a debit balance of $590 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 7% of accounts receivable.

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