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At 1 January 20×1,there was an allowance for receivables of $3000.During the year ,$ 1000 of debts were written off as irrecoverable, and $ 800 of debts previously written off were recovered.At 31 December 20X1, it was decided to adjust the allowance for receivables to 5% of receivables which are $20000.
What is the total receivables for the year?
At 1 Jan X1: Allowance: 3000
At 31 Dec X1: Allowance: 20,000 * 5%= 1,000
So expense decrease: (2000)
1000 receivable is written off, so expense increase : 1000
800 were recoverred, so expense decrease (800)
So expense decrease: (1800)I think total receivables is 20,000+1,000=21, 000
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