ACCA F3 IRRECOVERABLE EXPENSE 2
At 31 December 2014 a company's receivables totalled $350,000 and an allowance for receivables of $5,000 had been brought forward from the year ended 31 December 2013.
It was decided to write off debts totalling $8,000 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 | 350,000 | |
| Less Write Off | 8,000 | 8,000 |
| 342,000 | ||
| 7% New Allowance | 23,940 | 23,940 |
| Year End Receivables in Financial Position | 318,060 | |
| Less opening balance allowance for receivables | (5,000) | |
| Irrecoverable expenses in Income statement | 26,940 |
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