Problem part 1
problem part 2
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 $48,000 during the first three months of 2022 and that the Accounts Receivable balance on March 31 , 2022 , is $22,467. Required: 1a. 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. 1b. 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 $20,850 and that one account of $94 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 ? Selected ledger account balances for Business Solutions follow. Required: 1. Assume that Business Solutions does not acquire additional office equipment or computer equipment in 2022 . Compute amounts for the year ended December 31, 2022, for Depreciation expense-Office equipment and for Depreciation expense-Computer equipment (assume use of the straight-line method). 2. Given the assumptions in part 1, what is the book value of both the office equipment and the computer equipment as of December 31,2022 ? 3. Compute the three-month total asset turnover for Business Solutions as of March 31, 2022. 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 $48,000 during the first three months of 2022 and that the Accounts Receivable balance on March 31 , 2022 , is $22,467. Required: 1a. 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. 1b. 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 $20,850 and that one account of $94 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 ? Selected ledger account balances for Business Solutions follow. Required: 1. Assume that Business Solutions does not acquire additional office equipment or computer equipment in 2022 . Compute amounts for the year ended December 31, 2022, for Depreciation expense-Office equipment and for Depreciation expense-Computer equipment (assume use of the straight-line method). 2. Given the assumptions in part 1, what is the book value of both the office equipment and the computer equipment as of December 31,2022 ? 3. Compute the three-month total asset turnover for Business Solutions as of March 31, 2022
