An extract from the general ledger of D Wyangala at 30 June 2022 showed the following account balances:

– accounts receivable control $68 288

– allowance for doubtful debts $1421

– GST payable $2500

– bad debts expense $640

– doubtful debts expense $250.

Following further analysis of the accounts receivable ledger, D Wyangala decided to write off a further $286

($260 + $26 GST) to bad debts and to increase the allowance for doubtful debts to 2.5% of accounts receivable. Assume the direct method is used for bad debt write-off.

You are required to prepare:

• an extract of the income statement, and

• an extract of the balance sheet.