Doubtful debts On 1 July 2018, Morton Limited had accounts receivable of $53 000 and an allowance for doubtful debts of $3100. During the year ended 30 June 2019, credit sales amounted to $...

Doubtful debts On 1 July 2018, Morton Limited had accounts receivable of $53 000 and an allowance for doubtful debts of $3100. During the year ended 30 June 2019, credit sales amounted to $432 500 and cash collected from customers was $417 400. At the end of the financial year, the credit manager decided that accounts totalling $1200 should be written off as bad debts and the allowance for doubtful debts increased to $4200. 1 What was the estimated collectable value of accounts receivable as at 30 June 2019? 2 What was the amount of the bad debts expense for the year ended 30 June 2019? 3 What are the main reasons for using the allowance method of accounting for bad debts rather than the direct write-off method?