G. Allan commenced business on I January 1982. At the end of the first year of operations trade debtors amounted to £17420, including an account for £350 which was considered to be a bad debt. In addition, a general provision for doubtful debts of £420 was considered necessary .

At the end of the second year of business trade debtors amounted to £19635, including two accounts totalling £560 which were considered to be doubtful. The doubtful debts provision is to be adjusted to make specific provision for the doubtful debts identified and to reduce the general provision to £250.

Required

(a) Prepare journal entries to record the adjustments, required by G. Allan in respect of bad and doubtful debts for 1982 and 1983.

(b) Show the bad debts expense and provision for doubtful debts accounts for the two years.

(c) Identify the amount to be shown for trade debtors in the Balance Sheets prepared at the end of 1982 and 1983.

(d) Should G. Allan be faulted for allowing doubtful debts to arise?