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The closing trade receivables as at 31/12/2020 before bad debts written off were £140,000. The business has increased its allowance on trade receivables from 1% during 2019 to 5% during 2020 on closing trade receivables after bad debts written off, to reflect the worsening economic environment due to COVID. No bad debts were incurred and recorded during the year ended 31/12/2019. The following two transactions have just been recorded in preparation for finalising the financial statements for the year ending 31/12/2020: No 1 2 ASSETS -£20,000 (trade receivables) -£4,000 (trade receivables / Allowance) EXPENSES + £20,000 (bad debts written off) +£4,000 (doubtful debts) (Op) EQUITY REVENUES LIABILITIES What is the "allowance for trade receivables" balance shown on the Statement of Financial Position as at 31/12/2019?

The closing trade receivables as at 31/12/2020 before bad debts written off were £140,000. The business has increased its allowance on trade receivables from 1% during 2019 to 5% during 2020 on closing trade receivables after bad debts written off, to reflect the worsening economic environment due to COVID. No bad debts were incurred and recorded during the year ended 31/12/2019. The following two transactions have just been recorded in preparation for finalising the financial statements for the year ending 31/12/2020: No 1 2 ASSETS -£20,000 (trade receivables) -£4,000 (trade receivables / Allowance) EXPENSES + £20,000 (bad debts written off) +£4,000 (doubtful debts) (Op) EQUITY REVENUES LIABILITIES What is the "allowance for trade receivables" balance shown on the Statement of Financial Position as at 31/12/2019?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The closing trade receivables as at 31/12/2020 before bad debts written off were £140,000. The business has increased its allowance on trade receivables from 1% during 2019 to 5% during 2020 on closing trade receivables after bad debts written off, to reflect the worsening economic environment due to COVID. No bad debts were incurred and recorded during the year ended 31/12/2019. The following two transactions have just been recorded in preparation for finalising the financial statements for the year ending 31/12/2020: No 2 ASSETS -£20,000 (trade receivables) -£4,000 (trade receivables / Allowance) EXPENSES + £20,000 (bad debts written off) +£4,000 (doubtful debts) 11 (Op) EQUITY REVENUES LIABILITIES What is the "allowance for trade receivables" balance shown on the Statement of Financial Position as at 31/12/2019?
Transcribed Image Text:The closing trade receivables as at 31/12/2020 before bad debts written off were £140,000. The business has increased its allowance on trade receivables from 1% during 2019 to 5% during 2020 on closing trade receivables after bad debts written off, to reflect the worsening economic environment due to COVID. No bad debts were incurred and recorded during the year ended 31/12/2019. The following two transactions have just been recorded in preparation for finalising the financial statements for the year ending 31/12/2020: No 2 ASSETS -£20,000 (trade receivables) -£4,000 (trade receivables / Allowance) EXPENSES + £20,000 (bad debts written off) +£4,000 (doubtful debts) 11 (Op) EQUITY REVENUES LIABILITIES What is the "allowance for trade receivables" balance shown on the Statement of Financial Position as at 31/12/2019?
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