The following data is extracted from the financial records of AU Tiles. The data is in relation to the financial year ending 30 June 2019 and 30 June 2020

	30 June 2019	30 June 2020
	$	$
Cash at bank	16,500	19,500
Inventories	981,000	1,134,000
Accounts receivable	720,000	750,000
Bills receivable	12,750	14,700
Bad debts written off during the year	9,300	-
Sales revenue for the year	2,730,000	3,900,000
Discount allowed	4,800	4,200

The business uses the Income Statement method to estimate its doubtful debts each year. It has been estimated that 1% of the sales revenue of the year will be the bad debts expense for the year. At the beginning of the financial year of 2019, the Allowance for Doubtful Debts account has a credit balance of $18,000.

Required:

1. Determine the amounts of the following accounts. Show your workings for each item. (2 marks)

1. Bad debts expenses for the year ending 30 June 2019
2. Allowance for doubtful debts at 30 June 2019
3. Bad expenses for the year ending 30 June 2020
4. Allowance for doubtful debts at 30 June 2020

2. Calculate the receivable turnover ratio for year 2020 and comment on the ratio. (2 marks)
3. Discuss the differences between ageing method and percentage of net credit sales method. (2 marks)
4. Using the information provided in the question and your calculation from requirement A, prepare the Current Assets section of the balance sheet as at 30 June 2020. (2 marks)