Question 4 The following is an excerpt from the trial balance of Morwell Shop Supplies Ltd: Account Debit Credit Accounts receivable $ 120,000 Sales $880,000 Sales returns and allowances $20,000 Required: a. Assume Morwell Shop Supplies uses the direct write-off method to account for uncollectable accounts, prepare the general journal adjusting entry as at 30 June, assuming that a former client has been declared bankrupt. The amount owing is $1,200 and is now uncollectable. b. Now assume Morwell Shop Supplies uses the allowance method to account for receivables. If the Allowance for Doubtful Debts account has a credit balance of $1,600 in the trial balance, journalise the adjusting entry as at 30 June, assuming uncollectable receivables, based on objective evidence, are expected to be: 2% of net sales; and i1. 10% of accounts receivable (2 + (4 +4) - 10 marks)