the sales revenue in a company was $200000 and its accounts receivable were 5% of turnover. the company wishes to have an allowance for receivables of 4% of receivables which would make allowance one third higher than current allowance how the profit affected by change in allowance will be calculated when we don't know how to calculate turnover?
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6y ago#1Please do not ask the same question 3 times!! I have deleted your other two posts of this question.
We do know the turnover - it is the sales revenue which is $200,000.
Therefore the receivables at 5% x $20,000 = £10,000 and so the allowance is 4% x 10,000 = $400.
This is 1/3 higher than the current allowance, and so the current allowance is $300 and the change in the allowance is $100.
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