The following are accounts for KIMEK Inc, a shoe and clothes wholesale store, as of 31 December 2020 just before closing adjustments for allowance for doubtful accounts. Prior to closing these accounts, the Company also found out that its customer TopTop LLP, for which 100% allowance was created in 2019, went bankrupt, thus its accounts are to be written off.

KIMEK Inc accounts before closing journal entries

	Customer	Accounts Receivables 31.12.2020	Accounts Receivables 31.12.2019	Allowance for Doubtful Accounts 31.12.2019
1	Intertop Inc	$100 000	$90 000	-
2	Sneakers	$87 000	$75 000	$4 000
3	Boots	$85 000	$73 000	$2 000
4	Asos	$38 000	$2 000	$2 000
5	TopTop LLP	$60 000	$60 000	$60 000
	Total	$370 000	$300 000	$68 000

During 2020 the KIMEK Inc made sales in the amount of $1 500 000 while sales returns and allowances equaled $120 000.

Required:

1. Prepare journal entries to record write-off of allowance for doubtful accounts related to TopTop LLP and recognition of uncollectible accounts expense for the period. Assume the estimated expense is 2 per cent of net sales. (T-accounts can be used for convenience). (2 points)
2. Give the entry to record the estimated expense for the period if the allowance account is to be adjusted to 5 per cent of outstanding receivables instead of as in (a). (1.25 points)
3. What is the receivables balance net of allowance to be reported on the face of statement of financial position as at 31 December 2020? (0.5 points)