Bob has trade receivables of £422,000 at 30 September 2019. This trade receivables figure includes a known irrecoverable debt of £18,000. At 30 September 2018, Bob had set up an allowance for receivables of £20,000. At 30 September 2019, Bob wishes to create an allowance for receivables of 4% of trade receivables. What is the net figure that Bob will disclose in his statement of financial position for trade receivables at 30 September 2019?

Question

Quizplus · Accepted Answer

The net figure for trade receivables is £405,120. This is calculated by taking the trade receivables of £422,000 and deducting the allowance for receivables of £18,000 (the known irrecoverable debt) and £16,880 (4% of £422,000).

Bob Has Trade Receivables of £422,000 at 30 September 2019