At the start of a financial year a firm's gross trade receivables amounted to £10,000. At the end of the year this amount had increased by 20%. During the year £30,000 was received from credit customers and discounts totalling £2,000 were allowed to credit customers. Bad debts written off amounted to £4,000. Credit sales for the year were:

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Gross trade receivables at the end of the year = £10,000 x 120% = £12,000Gross trade receivables at the end of the year = Opening gross trade receivables + Credit sales - Cash received from credit customers - Discounts allowed to credit customers + Bad debts written off£12,000 = £10,000 + Credit sales - £30,000 - £2,000 + £4,000Credit sales = £12,000 - £10,000 + £30,000 + £2,000 - £4,000Credit sales = £38,000

At the Start of a Financial Year a Firm's Gross