At 30 September 2020, Avery Ltd has Accounts receivable of $41,000 and Allowance for Doubtful Debts had a credit balance of $3,000. Avery Ltd uses the net credit sales method to account for its bad debts. During October 2020, Avery Ltd recorded the following transactions:

• Sales of $154,000 ($37,000 for cash, the remaining on credit)

• Collections on account $56,000

• Bad debt expense is estimated to be 4% of net credit sales

• Bad debts written off is $2,400

Required

• Prepare the general journal entries for the bad debts written off for the month of October 2020.

• Prepare the general journal entries to record the provision for bad debts required for the month of October 2020. Show all workings.

• Prepare an extract of the Statement of Financial Position for Avery Ltd for the month ending 31 October 2020 showing the amount of Accounts Receivable and the Allowance for Doubtful Debts.