Kamaraj commenced business on 1 January 2016 and prepares her financial statements to 31 December every year. For the year ended 31 December 2016, bad debts written off amounted to $1,800. It was also found necessary to create an allowance for doubtful debts of $3,000.

In 2017, debts amounting to $2,500 proved bad and were written-off. Selvi, whose debt of $300 was written-off as bad in 2016, settled her account in full on 30 November 2017. As at 31 December 2017 total debts outstanding were $100,000. It was decided to bring the provision up to 5% of this figure on that date.

In 2018, $5,000 of debts were written-off during the year and another recovery of $400 was made in respect of debts written-off in 2016. As at 31 December 2018, total debts outstanding were $80,000. The allowance for doubtful debts is to be changed to 6% of this figure.

You are required to prepare for the years 2016, 2017 and 2018, the:

i. Bad Debts Account

ii. Bad Debts Recovered Account

iii. Allowance for Doubtful Debts Account

iv. An Extract of the Statement of Profit or Loss