Trade receivables reported in the books of J&B Watersports as at 31 December 2010 amounted to £208,500. An analysis of the number of days debts had been outstanding showed the position as stated on the right: after undertaking a review of all trade receivables it was decided that a debt of £3,600 outstanding for more than 60 days was definitely not recoverable and past experience indicated that an allowance should be made of 2% of amounts outstanding for between 31 and 60 and 5% of amounts outstanding for more than 60 days.

Required: 

Calculate the amount to be written off as bad debts in the Statement of income and show how trade receivables will be reported in the Statement of financial position as at 31 December 2010.

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Days outstanding Within 30 days Between 31 and 60 days Beyond 60 days 4 124,500 62,400 21,600