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PSA7.8 At 31 December 2016, the trlal balance of Lexington Pty Ltd contalned the following amounts before adjustment: DEBITS CREDITS Accounts Receivable Allowance for Doubtful Debts Sales $400 ooo $1 000 950 000o Requlred a. Based on the Information given, which method of accounting for bad debts is Lexington Pty Ltd using the b. Prepare the adjusting entry at 31 December 2016, for bad debts expense assuming that the ageing schedule C. Repeat part (b) assuming that instead of a credit balance there is a $10o0 debit balance in the Allowance for d. During the next month, January 2017, a $5000 account recelvable is written off as uncollectable. Prepare the e. Repeat part (d) assuming that Lexington uses the direct write-off method Instead of the allowance method In f. What type of account is the Allowance for Doubtful Debts? How does it affect how accounts direct write-off method or the allowance method? How can you tell? indicates that $11 750 of accounts recelvable will be uncollectable Doubtful Debts. Journal entry to record the write-off accounting for uncollectable accounts receivable recelvable is reported on the statement of financial position at the end of the accounting period