Samples Assessment 1 - Task 4 - Help!

Rachelsls
Rachelsls Registered Posts: 9
Hi All,

Can anyone help me with Task 4, Question A on Sample Assessment 1 (attached image). I am completely stuck to how the answer is 46 and just don't seem to understand how to get to that answer.

Please can someone help?!

Many thanks

Comments

  • oscardoyle
    oscardoyle Registered Posts: 7 New contributor 🐸
    Would love to help but need to see the rest of the question
  • dumutroba
    dumutroba Registered Posts: 262
    The allowance for doubtful debts need to be adjusted to 15 of trade receivables, 17900x1%=179
    The current allowance for doubtful debts stands at 225
    The ADJUSTMENT needed is 46, 225-179=46
    Furthermore as this is a reduction in allowance for doubtful debts the bookkeeping entries will be Dr allowance for doubtful debts, Cr allowance for doubtful debts:adjustments
    AAT Level 2. 2018 Distinction
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  • Rachelsls
    Rachelsls Registered Posts: 9
    Thank you so much for your help!
  • dumutroba
    dumutroba Registered Posts: 262
    *need to say 1% of trade receivables, not 15

    You are welcome
    AAT Level 2. 2018 Distinction
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