At 1 July 20X7 a company’s allowance for receivables was $12,000.
At 30 June 20X8, trade receivables amounted to $209,500. It was decided to write off $18,000 of these debts and adjust the allowance for receivables to $15,000.
What are the final amounts for inclusion in the company’s statement of financial position at 30 June 20X8?
Answer
Trade receivables = 209,500 – 18,000 = 191,500
Allowance for receivables = 15,000
Net balance = 191,500 – 15,000 = 176,500