At 1 July 20X4 the receivables allowance of ABC Co was $4,500.
During the year ended 30 June 20X5 debts totaling $3,650 were written off. The receivables allowance required was to be $4,000 as at 30 June 20X5.
What amount should appear in ABC Co ‘s statement of profit or loss for receivables expense for the year ended 30 June 20X5?
Answer
| $ | |
| Irrecoverable debts written off | 3,650 |
| Reduction in allowance (4,500-4,000) | (500) |
| Receivables expense | 3,150 |