Question no. 1 Percent of sales method; write-off At year-end (December 31), Rashed Company estimates its bad debts as 0.75% of its annual credit sales of AED770,000. Rashed records its bad debts expense for that estimate. On the following March 15, Rashed decides that the AED 1,050 account of A. Abdulla is uncollectible and writes it off as a bad debt. On April 15, Abdulla unexpectedly pays the amount previously written off. Required: Prepare the journal entries of Rashed to record these transactions and events of December 31, March 15, and April 15. Question no. 2 Percent of accounts receivable method At each calendar year-end, Futaim Electric Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2018, it has outstanding accounts receivable of AED210,000, and it estimates that 3.5% will be uncollectible. Required: Prepare the adjusting entry to record bad debts expense for year 2018 under the assumption that the Allowance for Doubtful Accounts has (a) a AED2,200 credit balance before the adjustment and (b) a AED 1,400 debit balance before the adjustment