On 1 July 2015, Morton Limited had accounts receivable of $53 000 and an allowance for doubtful debts of $3100. During the year ended 30 June 2016, credit sales amounted to $432 500 and cash collected from customers was $417 400. At the end of the financial year, the credit manager decided that accounts totalling $ 1200 should be written off as bad debts and the allowance for doubtful debts increased to $4200.

1. What was the estimated collectable value of accounts receivable as at 30 June 2016?

2. What was the amount of the bad debts expense for the year ended 30 June 2016?

3. What are the main reasons for using the allowance method of accounting for bad debts rather than the direct write-off method?