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Headington is owed 37500 Usd by its customers at the start, and 39000 at the end, of its year ended 31 Dec 2008.
During the period, cash sales of 263500 Usd and credit sales of 357500 were made, discounts allowed amounted to 15750 Usd and discounts received 21400. Irrecoverable debts of 10500 were written off and Headington wishes to retain its allowances for receivables at 5% of total receivables.
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I’m guessing your asking for balancing figure taken to Income a/c for Credit Sales which I think is 329,750.
Thanks t4xd for your comments)
Could you be kind to explain, the General Allowance is not calculated in this example?@t4xd said:
I’m guessing your asking for balancing figure taken to Income a/c for Credit Sales which I think is 329,750.- Topics: 0
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I don’t think you’re posting the full question, hence my initial guess.
General Allowance for receivables: is an estimate of the percentage of remaining debts, (i.e. after deducting any bad debts and specific doubtful debts), which are ultimately not expected to be paid.
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