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 $350,000.
It was decided to write off debts totalling $1,000 and to adjust the allowance for receivables to the equivalent of 3 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 | 350,000 | |
| Less Write Off | 1,000 | 1,000 |
| 349,000 | ||
| 3% New Allowance | 10,470 | 10,470 |
| Year End Receivables in Financial Position | 338,530 | |
| Less opening balance allowance for receivables | (5,000) | |
| Irrecoverable expenses in Income statement | 6,470 |