John has opening balances on his trade receivables of £68,000 and an allowance for receivables of £3,400. During the year John made cash sales of £146,000 and credit sales of £354,000. He collected cash from his credit customers of £340,000. At the end of the year John identified £2,000 of bad debts to write off. In addition, he estimated the need to increase the allowance for receivables to £4,000. A. Calculate the net trade receivables balance to present in the Statement of financial position at the year end B. What is the total bad and doubtful expense to be charged to the Statement of Profit or loss for the year?
John has opening balances on his trade receivables of £68,000 and an allowance for receivables of £3,400. During the year John made cash sales of £146,000 and credit sales of £354,000. He collected cash from his credit customers of £340,000. At the end of the year John identified £2,000 of bad debts to write off. In addition, he estimated the need to increase the allowance for receivables to £4,000. A. Calculate the net trade receivables balance to present in the Statement of financial position at the year end B. What is the total bad and doubtful expense to be charged to the Statement of Profit or loss for the year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
John has opening
receivables of £3,400. During the year John made cash sales of £146,000 and credit sales of
£354,000. He collected cash from his credit customers of £340,000.
At the end of the year John identified £2,000 of
the need to increase the allowance for receivables to £4,000.
A. Calculate the net trade receivables balance to present in the
at the year end
B. What is the total bad and doubtful expense to be charged to the Statement of Profit or loss
for the year?
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