The numbers given to you in the first table are before writing off bad debt. For example, the 2016 end of the year accounts receivable before wiritng off bad debt is: 29 960 After that, you need to deduct the bad debts, as mentioned in second table. This can be done by debiting the bad debt account for that year... bringing the total of your accounts receivable for the year 2016 to:27 870Now 5% of the figure above, i.e. the remaining accounts receivable, should be recorded as allowance for doubtful debt. This will be done by crediting the allowance account, and debiting the P&L account. In the next years, the same process will be repeated year after year separtely, just having in mind that you need to either INCREASE or DECREASE the allowance level from the last year balance to the new year required balance. So it will be the difference from one year to another which will be recorded.Treat part b as a separte question! These two were among the debts written off in the previous step, but treat it as a new question. How would you write-off an account receivable? Just show that in the T-accounts, and you're good to go :)

Instructions, Start Here List of Questions Hints ENTER YOUR COURSE ID IN THE BLACK BOX BELOW: Course ID: 240 Question 1: (from chapter 25) D. Faculti started in business buying and selling law textbooks, on Ist January 2016. At the end of each of the next three years, his figures of accounts receivable, before writing-off any bad debt were as follows: 31-Dec-16 29 960 31-Dec-17 38 060 31-Dec-18 4 710 Bad debts to be written-off (after recording the accounts receivables above) are as follows: E 31-Dec-16 2 090 31-Dec-17 746 The allowance for doubtful debts in each year is 5% of accounts receivable. Required: (See Hint 1 on the Hints sheet) (a) Prepare Faculti's bad debts expense account and allowance for doubtful debts account for 2016, 2017 and 2018. (b) The amounts due from B. Roke ($70) and H. A. Ditt ($42) became irrecoverable in 2016 and were written-off. Show the entries in the ledger accounts to record these write-offs