ACCA F3 IRRECOVERABLE EXPENSE 2
At 31 December 2014 a company's receivables totalled $300,000 and an allowance for receivables of $15,000 had been brought forward from the year ended 31 December 2013.
It was decided to write off debts totalling $6,000 and to adjust the allowance for receivables to 8% of the receivables.
What charge for receivables expense should appear in the company's statement of profit or loss for the year ended 31 December 2014?
$ | $ | |
Trade receivables | 300,000 | |
Less Write Off | 6,000 | 6,000 |
294,000 | ||
8% New Allowance | 23,520 | 23,520 |
Year End Receivables in Financial Position | 270,480 | |
Less opening balance allowance for receivables | (15,000) | |
Irrecoverable expenses in Income statement | 14,520 |
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