ACCA FA2 ALLOWANCE FOR RECEIVABLES
At 1 May 2012 Ruka’s receivables allowance was $600. At 30 April 2013, the balance on her trade receivables account was $20,000 and she decided to write off debts of $400 as irrecoverable. She estimated that her receivables allowance at 30 April 2013 should be equivalent
to 2% of outstanding balances.
What amount should be charged to Ruka’s income statement for the year to 30 April 2013?
Suggested Solution.
| $ | $ | |
| Financial Position | income statement | |
| Receivables | 20,000 | |
| Irrecoverable debts | 400 | 400 |
| Receivables after Irrecoverable debts | 19,600 | |
| 2 % allowance | 392 | 392 |
| Closing receivables | 19,208 | |
| Less existing allowance | (600) | |
| Answer | 192 |
To do the same topic again in ACCA FA2 allowance for receivables
To do another topic in ACCA FA2