a. Chong Company is closing its books for the year ended 30 June 2021. Based on past experience, it maintains allowance for doubtful debts at different rates depending on the ageing of overdue receivable balances. The aged analysis of receivable balances and percentage requirements for the allowance for doubtful debts are presented below: Receivable Percentage Aged Analysis Not due yet 1-30 days overdue Balance requirement $5,000 nil 6,500 2% 31-60 days overdue 6,330 8% 61-90 days overdue 3,620 12% More than 90 days overdue 2,310 30% Accounts receivable balance is GST inclusive. Allowance for Doubtful Debts account currently has a credit balance of $350. i. ii. Required: Calculate the amount of allowance required as on 30 June 2021 and prepare necessary journal entry. Narration is required. Assume on 21 July 2021, $784 (including GST) was received from a customer. This amount was previously written off as bad on 1 March 2019. Prepare the journal entries required to record the receipt of payment. Narrations are required. iii. Briefly explain the direct write-off method of accounting for bad debts and provide an example of business when the direct write-off method is appropriate. b. Beng Manufacturing Company started business on 1 January 2020 selling different models of generators for commercial use. All products are sold with a one-year warranty covering materials and labour for any manufacturing defect. A warranty provision was created amounting to $3,500 for the year ended 31 December 2020. During the year ended 31 December 2021, actual warranty claims totalled $4,740. Based on current year's sales, the company needs to maintain a warranty provision of $4,500 at year end. Required: . ii. Prepare the journal entries required on 31 December 2021 to record the warranty claims for the current year and to record the warranty provision at 31 December 2021. Narrations are required. Briefly define the term 'contingent liability'. Using an example, explain how a contingent liability should be treated in the financial statements