Irrecoverable debts and allowances

Please do not simply set me test questions and expect an answer! You must have an answer in the same book in which you found the question, and so you should ask about whatever it is in the answer that you are not clear about and then I will help you. The allowance at the start of the year was 20,000 + (2.5% x (380,000 - 20,000)) = 29,000. The allowance required at the end of the year is 3% x 420,000 = $12,600 Therefore the allowance will be reduced by 29,000 - 12,600 = 16,400. Therefore the charge in the SOPL = 28,000 - 16,400 = 11,600 This is all explained in my free lectures. The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.