ACCA F3 MOCK EXAM RECEIVABLE
At 30 June 2005 a company’s allowance for receivables was $40,000. At 30 June 2006 trade receivables totalled $450,000.
It was decided to write off debts totalling $3,000 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 | 450,000 | |
| Less Write Off | 3,000 | 3,000 |
| 447,000 | ||
| 9% New Allowance | 40,230 | 40,230 |
| Year End Receivables in Financial Position | 406,770 | |
| Less opening balance allowance for receivables | (40,000) | |
| Irrecoverable expenses in Income statement | 3,230 |