7.1 Dino Faculti started business buying and selling knitting machines on 1 January 20X3. His debtors’ figures, before writing off any bad debts, were as follows:

31 December 20X3 £30,000 31 December 20X4 £38,100 31 December 20X5 £4,750 Bad debts to be written off were as follows:

in 20X4 £2,100 in 20X5 £750 and the required figure for doubtful debts, in each year, is 5 per cent of outstanding debtors. Required:

Faculti’s bad debts expense and doubtful debts accounts together with supporting calcu¬ lations.