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 $100,000.
It was decided to write off debts totalling $1,000 and to adjust the allowance for receivables to the equivalent of 6 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 | 100,000 | |
| Less Write Off | 1,000 | 1,000 |
| 99,000 | ||
| 6% New Allowance | 5,940 | 5,940 |
| Year End Receivables in Financial Position | 93,060 | |
| Less opening balance allowance for receivables | (5,000) | |
| Irrecoverable expenses in Income statement | 1,940 |