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 |