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I have a doubt.
Doris currently has a receivables balance of $47,800 and an allowance for receivables of $1,250. She has just received $150 in respect of half of a debt that she had made an allowance against. She now believes the other half of the debt to be bad and wants to write it off. She also wants to increase the allowance for receivables to $1,500.
What is the total charge to profit or loss in respect to these items?
Can someone help me with this problem?This is not examinable in Paper MA.
Irrecoverable debts are examinable in Paper FA, not MA.
Please don’t simply type out test questions and expect to be provided with an answer.
You must have an answer in the same book. in which you found the question, so ask about whatever it Isi n the answer that you are not clear about and then I will explain.
Hi Mr. Maffot, could you please explain how to arrive at the answer to the above question. I tried to answer this question but it is extremely confusing.
Also I studied F3 with the BPP book and im referring to the kaplan book for extra questions. I never came across questions like this in the bpp study guide. Will it affect my exam performance sir?
There are certainly questions like this in the BPP Revision Kit for Paper FA, and questions like this can certainly be asked in the exam.
The expense is the cost of writing off the debt ($150) plus the cost of increasing the allowance from 1250 to 1500 ($250). So a total expense of $400.
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