ACCA F3 MOCK EXAM RECEIVABLE
At 30 June 2005 a company’s allowance for receivables was $5,000. At 30 June 2006 trade receivables totalled $300,000.
It was decided to write off debts totalling $6,000 and to adjust the allowance for receivables to the equivalent of 9 per cent of the trade receivables based on past events.
What figure should appear in the income statement for the year ended 30 June 2006 for these items?
| Trade receivables | 300,000 | |
| Less Write Off | 6,000 | 6,000 |
| 294,000 | ||
| 9% New Allowance | 26,460 | 26,460 |
| Year End Receivables in Financial Position | 267,540 | |
| Less opening balance allowance for receivables | (5,000) | |
| Irrecoverable expenses in Income statement | 27,460 |