At 30 September 2002 a company’s allowance for doubtful debts amounted to $38,000, which was five per cent of
the receivables at that date.
At 30 September 2003 receivables totalled $868,500. It was decided to write off $28,500 of debts as bad and to
keep the allowance for doubtful debts at five per cent of receivables.
What should be the charge in the income statement for the year ended 30 September 2003 for bad and doubtful
debts?
A $42,000
B $33,925
C $70,500
D $32,500

 D 28,500 + 42,000 – 38,000

    allowance for doubtful debts c/d  (868500-28500)*5%=42000

   difference between allowance for doubtful debts  42000-38000=4000

ha