DEPARTMENTFFUSNESS ACCOUNTING TESTAS CLASS: AAACI, AABA1, AABA2, AAMKI TIME: 1 Hour TOPIC: Bad Debts and Provision for Bad/Doubtful Debts Raymond Johnson commenced business on 1 January 2006 and mak accounts to 31 December. For the year ended 31 December 2006, bad debts written off amounted to $2,350. It was also found necessary to create a provision for doubtful debts to be equal to 5% of the remaining debtors which amounted to $80,000 at 31 December, 2006. es his James In 2007, debts amounting to S1,550 proved bad and were written off. Swanston whose debt of $875 was written off as bad in 2006 settled her account in full on June 30, 2007. As at 31 December 2007 total debtors outstanding were $60,000. It was decided to bring the provision to 5% of this figure on that date. In 2008, $3,000 debts were written off during the year, and on October 15 another recovery of $300 was received from Charles Quintin in respect of debt written off in 2006. As at 31 December 2008, total debtors outstanding were $70,000. The provision for doubtful debts is to be maintained at 5% of this figure. You are required to show for the years 2006, 2007, and 2008, the following: (a) Bad Debts Account. (b) Bad Debts Recovered Account (c) Provision for Bad/Doubtful Debts Account. (d) Extract from the Profit and Loss Accounts. (e) Extract from the Balance Sheets