Question 3 KMN Company sells multimedia related products on credit to its customers and has extracted the following information for the last TWO years. Its financial year ends on 31 December. Accounts receivable's balance at 31 December 2018 was RM150,000. Accounts receivable's balance at 31 December 2019 was RM230,000. Accounts receivable's balance at 31 December 2020 was RM250,000. Bad debts had been written off at year end were as follow: 2018 1 June 24 August Ms.Hidayah Mr. Dan RM1,900 RM 400 2019 7 March 26 October Mr. Hassan Mr. Dippa RM1,540 RM1,380 At end of each year, the company considered which of its debtors appeared doubtful and carried forward an allowance of: 2018 2019 2020 RM3,000 RM3,450 RM4,000 Required: (a) Prepare the Bad Debts Accounts and Allowance for Doubtful Debts Account for 2018, 2019 and 2020. (12 marks) (b) Explain the importance of allowance for doubtful debts for the purpose of financial reporting. (you must support your answer with the most relevant accounting concept). (5 marks) (c) Briefly explain what could happen if a company does not estimate a bad debt allowance? (5 marks) (d) Can the allowance for doubtful debts' balances of two consecutive years same? Briefly explain what it means? (3 marks) (Total: 25 marks)