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at dec 31 2008 a company receivable totaled $600000 and an allowance for receivable of $60000 had been brought down from the year ended dec 31 2007
it was decided to write off debts totaling 25000 and to adjust allowance for recievable 10%of the receivable
what change for ded and doughtfull debts should appear in the company income statement for the year dec 31 2008
The allowance required at the end of this year is 10% x (600,000 – 25,000) = 57,500
Therefore the expense for irrecoverable and doubtful debts is:
Irrecoverable debts 25,000, less the decrease in the allowance of 2,500 (60,000 – 57,500)
So a total expense of 22,500.Our free lectures on irrecoverable and doubtful debts will help you. Our free lectures are a complete course for Paper F3 and cover everything needed to be able to pass the exam well.
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