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Q: In the statement of financial position at 31dec 2005,boris reported net receivables of $12000 ..during 2006 he made sale on credit of $125000 and received cash from credit customers amounting $115500,, at 31dec 2006 boris wished to write off debts of $7100 and increase the allownce for receivables by $950 to $2100..
what is the net receviables figure @ 31 dec 2006?
a: $12300
b:$13450
c:$14400
D:$15550the correct answere is (B)
but when i am trying to do.. i wil gt $13250 net receviable .. i want to ask that why we add allowance 2100-950=1150 in the opening net receviable amount..? in my thought we have to addup only last year closing allownce figer that is $950 to get correct opening blance of receviable for year2006… sir john please explain it to me ..The allowance was increased by 950, so at the start of the year it must have been 2100-950 = 1150.
The net receivables at the start were 12000. So it must have been receivables of 13150 less allowance of 1140.
Receivables at the end of the year will be 13150 + 125000 – 115500 – 7100 = 15550
So net receivables are 15550 less allowance of 2100 = 13450.
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