(a) On 1 January 2015 there was a balance of 500 in the an Allowance for Doubtful Debts Account, and it was decided to maintain the provision at 5% of the accounts receivable at each year end. The debtors on 31 December each year were:

YEAR 2015 12,000 2016 8,000 2017 8,000

Show the necessary entries for the three years ended 31 December 2015 to 31 December 2017 inclusive in the following; (i) the Allowance for Doubtful Debts Account; (ii) the Statements of Profit or Loss.

(b) What is the difference between bad debts and allowance for doubtful debts? (c) On 1 January 2017 Warren Mair owed Jason Dalgleish 130. On 25 August 2017 Mair was declared bankrupt. A payment of 30p in the was received in full settlement. The remaining balance was written off as a bad debt. Write up the account of Warren Mair in Jason Dalgleish's ledger.