The financial year of Dominica Trading ends on September 30, 20X7 and its external auditor was called in to verify the accounting records of the business.
The auditor ascertained that at the end of the financial year outstanding accounts
receivable totalled $61,000 but of this amount $5,800 were to be written off as bad.
The auditor also found that the business was able to collect $1,650 cash on February 6, 20X7 from K. Hayes, whose debt of $3,700 had been written off as bad on September 30, 20X5. Dominica Trading maintains a provision for bad debts account that is based on 4% of total accounts receivable outstanding at the end of each financial year. At October 1, 20X6 accounts receivable amounted to $74,600.
Prepare the following in the books of Dominica Trading for the financial year ended September 30, 20X7:-

(I)K. Hayes Account
(IV)Bad Debts Provision Account
(II)Bad Debts Recovered Account
(V)Income Statement (Extract)
(III)Bad Debts Account
(IV)Balance Sheet (Extract

Dominica Trading maintains a provision for bad debts account that is based on 4% of total accounts receivable outstanding at the end of each financial year. At October 1, 20X6 accounts receivable amounted to $74,600.
Prepare the following in the books of Dominica Trading for the financial year ended September 30, 20X7:-

Bad Debts Provision Account

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