The following information relates to the business of David & Sons Company. The financial year of the company ends at 30 June 2022.

Opening balance of Account Receivables$22 200

Opening balance of the Allowances for Doubtful Debts 2 820

Closing Balance of Account Receivables 28 860

Net credit sales during the year 78 000

During the year, $2 160 of account receivables were written off as bad debts. David & Sons Company uses the net credit sales method to estimate doubtful debts. It is estimated that three per cent of the net credit sales will become uncollectable. Ignore GST.

Required:

a) Prepare the following accounts (T-account) at the end of 2022 (7 marks)

a. Account Receivables

b. Allowances for Doubtful Debts