ACCA F3 IRRECOVERABLE EXPENSE 2
At 31 December 2014 a company's receivables totalled $300,000 and an allowance for receivables of $25,000 had been brought forward from the year ended 31 December 2013.
It was decided to write off debts totalling $1,000 and to adjust the allowance for receivables to 9% 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 | 1,000 | 1,000 |
| 299,000 | ||
| 9% New Allowance | 26,910 | 26,910 |
| Year End Receivables in Financial Position | 272,090 | |
| Less opening balance allowance for receivables | (25,000) | |
| Irrecoverable expenses in Income statement | 2,910 |
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