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hello teacher,
we have receivables 200000
writing off 2000
specific allowance at 60 % for 5000.
general allowance 10%
total allowance?which one is true?
1st
general: (200000-2000-5000)*10%=19300
specific: 5000*60%=3000
total=19300+30002nd
general: (200000-2000-3000)*10%=19500
specific: 5000*60%=3000
total=19500+3000The first is correct.
Given that they are having a specific allowance of 60% of the 5,000, they must expect that the remaining 40% will be paid in full and therefore they will not have a general allowance on that as well (which is what would be happening in the second solution).
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