Farzana Limited has trade receivables at 30 September 2019 of £275,000. Of these trade receivables, there is a known irrecoverable debt of £15,000. The directors also want to create an allowance for receivables of 5% of the remaining trade receivables. At 30 September 2018, the allowance for receivables was £17,000. What is the total charge to the statement of profit or loss for irrecoverable debts and the allowance for receivables for the year ended 30 September 2019?
A) £11,000
B) £13,000
C) £13,750
D) £15,000
Correct Answer:
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