ACCA F3 IRRECOVERABLE EXPENSE 2
At 31 December 2014 a company's receivables totalled $400,000 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 $2,000 and to adjust the allowance for receivables to 7% 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 | 400,000 | |
| Less Write Off | 2,000 | 2,000 |
| 398,000 | ||
| 7% New Allowance | 27,860 | 27,860 |
| Year End Receivables in Financial Position | 370,140 | |
| Less opening balance allowance for receivables | (15,000) | |
| Irrecoverable expenses in Income statement | 14,860 |
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