Irrecoverable Debt Expense

Source: ACCA F3 Kaplan Exam Kit, Question 67

In the year ended 30 September 20X8, Fauntleroy had sales of $7,000,000. Year end
receivables amounted to 5% of annual sales. Fauntleroy wishes to maintain the allowance
for receivables at 4% of receivables and as a result discovers that the allowance is 20%
higher than at the previous year end.
During the year irrecoverable debts amounting to $3,200 were written off and debts
amounting to $450 and previously written off were recovered.
What is the irrecoverable debt expense for the year?
A $5,083
B $5,550
C $5,583
D $16,750

First part of the answer:

Year end receivables 5% × $7,000,000 = $350,000
Year end allowance for receivables 4% × $350,000 = $14,000
Allowance at start of year 100/120 × $14,000 = $11,667
Increase in allowance = $2,333

Dear tutor,

In the answer above, I’m confused by the calculation of general allowance for receivables. In theory it is stated that General allowance should be calculated after the Receivables are adjusted for Specific Allowance. In our case we have Specific Allowance during the year of 3,200. Shouldn’t we calculate the year end General Allowance as:

(350,000 – 3200)*4% = 13,872 ?

Thank you in advance for you reply.