Question
Flower Ltd's trade receivables at 31 December 2018 were 25,000 and this amount includes 3,000 owed by Fruit Ltd. Flower Ltd has been notified that
Flower Ltd's trade receivables at 31 December 2018 were 25,000 and this amount includes 3,000 owed by Fruit Ltd. Flower Ltd has been notified that Fruit Ltd is being liquidated and the amount of 3,000 owing to the business will not be paid. Which of the following statements is true?
Trade receivables on the statement of financial position at 31 December 2018 should be 22,000 and no bad debts need to be charged as an expense in the statement of profit or loss.
Trade receivables on the statement of financial position at 31 December 2018 should be 22,000 and bad debts of 3,000 should be charged as an expense in the statement of profit or loss.
Trade receivables on the statement of financial position at 31 December 2018 should be 25,000 and no bad debts need to be charged as an expense in the statement of profit or loss.
Trade receivables on the statement of financial position at 31 December 2018 should be 25,000 and bad debts of 3,000 should be charged as an expense in the statement of profit or loss.
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