AP6-8 Determining Bad Debts and Reporting Accounts Receivable ( P6-8) C106-4 Modern Kitchens Inc (MKI) is a Montreal-based company that sells imported fancy Kitchenware to retailers Selected account balancts us at September 30, 2020, are shown below Debit Credit $119,000 Accounts receivable Allowance for doubtful accounts $3.000 Daring October 2020, the following transactions occurred: a. The company sold merchandise on account to various retailers for a total amount of $76,000 terms 2/10, 1/30. A few retailers who purchased merchandise for a pross amount of $40,000 paid the amount due within 10 days. A total of $16,000 of the October sales remained unpaid at October 31, 2020. b. Customers paid the company $50,000 for merchandise they purchased prior to September 30, 2020. These customers did not pay within the discount period. c Two of MKI's customers owed the company a total of $5,000 and were facing financial difficulties during October due to increased competition. They were forced to close their businesses before the end of October 2020. MKI does not expect to receive any money from these two customers and consider their acco