The following transactions relate to the gardening maintenance business of Steve Jones. The balance in the Allowance for Doubtful Debts account on 1 July 2018 was $7440. The bad debts during the year ended 30 June 2019 amounted to $5220. Debtors’ balances on 30 June 2019 after the bad debts had been written off total $162 960, and a new allowance of 5% of debtors is required. (Ignore GST for the purposes of this exercise.)

Required

(a) Prepare and balance the Allowance for Doubtful Debts account for the year to 30 June 2019.

(b) Show how the above information would be disclosed in:

i. the income statement for the year ended 30 June 2019 

ii. the balance sheet as at 30 June 2019.