Hitachi, Ltd., reports total revenues of ¥9,315,807 million for its fiscal year ending March 31, 2011, and its March 31, 2011, unadjusted trial balance reports a debit balance for trade receivables (gross) of ¥2,127,682 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.
b. Prepare the adjusting entry to record Bad Debts Expense assuming un collectibles are estimated to be 2.1% of year-end trade receivables (gross) and its unadjusted trial balance reports a credit balance of ¥10,000 million.