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On 1 September 20×8, one of Abu’s customers had went into bankruptcy and Abu recorded and Irrecoverable Debt Expense of $700. By the year end of 31 December 20×8, Abu had subsequently received $200 of this amount which has been correctly accounted for. There were no other irrecoverable debts in the year.
The total credited to the profit or loss in respect of the irrecoverable debts and allowances for irrecoverable debts for the year ended 31 December 20×8 was $3000. The allowance for irrecoverable debts balance at 1 January 20×8 was $5400
What is the allowance for irrecoverable debts balance at 31 December 20×8?
Zan’s trade receivables at 1 October 20X8 were $43,000. At 30 September 20X9, they were $19,791. She made sales to credit customers of $143,837 during the period and had prompt payment discounts taken of $18,900. $2,200 contra settlements was made with credit customers who also supplied Zan’s business.
How much cash did Zan receive from credit customers in the period?
Dear sir! Can I get the right answer with problem solution?1.10.X8 balance = 43,000
Sales invoices will increase this by 143,837 to 186,837.
Prompt payment discounts will reduce this by 18,900 to 167,937.
The contra will decrease this by 2,200 to 165,737. (Contras always reduce both the payables and receivables balances.)
However, the balance on 30.9.X9 is only 19,791. Cash received must have reduced it from 165,737 to 19,791 so the cash received is 165,737 – 19, 791 = 145,946.
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