Sorrento Interior Furnishings Pty Ltd has adopted the Allowance for Doubtful Debts Method. The Allowance for Doubtful Debts as at 1 July 2019 was $7,500 credit (CR). The write-off of bad debts for the 2019 2020 financial year was $8,000. The Allowance for Doubtful Debts as at 30 June 2020 was 7% of credit sales. Credit sales for the 2019 2020 financial year was $130,000 (Disregard GST) What is the adjusting entry to raise the Allowance for Doubtful Debts at 30 June 2020? Group of answer choices

DR: Bad Debts $9,100 CR: Allowance for Doubtful Debts $9,100

DR: Bad Debts $9,600 CR: Allowance for Doubtful Debts $9,600

DR: Accounts Receivable $8,000 & CR: Allowance for Doubtful Debts $8,000

DR: Bad debts $8,000 & CR: Allowance for Doubtful Debts $8,000

Q2

On 1 June 2023, Goodwin Limited acquired the business of Monty Inc. for $280 000. The carrying amount of Monty Inc's net assets at the time of the acquisition was $215 000 while independent valuers calculated their fair value at $250 000. Goodwin Limited should debit 'Goodwill' for the amount of: Group of answer choices

$30 000

$35 000

$0

$65 000