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- This topic has 3 replies, 2 voices, and was last updated 5 years ago by John Moffat.
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- April 9, 2019 at 9:47 am #511513
At 30 June 20X5 a company’s allowance for receivables was $39,000. At 30 June 20X6 trade receivables totalled $517,000. It was decided to write off irrecoverable debts totalling $37,000 and to adjust the allowance for receivables to the equivalent of 5% of the trade receivables based on past events.
What figure should appear in the statement of profit or loss for the year ended 30 June 20X6 for these items?
Q> how do you do this question? I keep getting the wrong answer.
April 9, 2019 at 10:43 am #511539I explain how to do it in my free lectures.
If you type your solution then I will explain why you are getting the wrong answer 🙂
April 9, 2019 at 6:48 pm #511578I have but I must have missed something
My workings:
carry amount at end of period $517,000 – irrecoverable debt of $37,000 to get the net receivables.
then net receivables x 5% to get allowance for this period and then subtract that from the net receivables.
April 10, 2019 at 6:42 am #511599The charge in the SOPL is the irrecoverable debt less the decrease in the allowance over the year.
Please do watch my free lectures again.
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