Receivables expense and allowance for receivable ( video below)
At the beginning of the year, the allowance for receivables was $1,000. At the year-end, the allowance required was $2,000. During the year $700 of debts were written off, which includes $200 previously included in the allowance for receivables.
What is the charge to statement of profit or loss for receivables expense for the year?
Answer
| charge | ||
| $ | $ | |
| Receivables allowance at year end | 2,000 | |
| Receivables allowance at beginning of year | 1,000 | |
| Increase in allowance | 1,000 | |
| Irrecoverable debts written off | 700 | |
| Total charge to statement of profit or loss | 1,700 |
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