QUESTION Receivables allowance 1 Corin Flake owns and runs the Aerobic Health Foods Shop in Dundee. He commenced trading on 1 January 20x1, selling health foods to customers, most of whom make use of a credit facility that Corin offers. (Customers are allowed to purchase up to $200 of goods on credit but must repay a certain proportion of their outstanding debt every month.) This credit system gives rise to a large number of irrecoverable debts, and Corin Flake's results for his first three years of operations are as follows. Year to 31 December 20X1 Gross profit $27,000 Irrecoverable debts written off $8,000 Debts owed by customers as at 31 December 20X1 $40,000 Allowance for receivables 212% of outstanding receivables Other expenses $20,000 Year to 31 December 20X2 Gross profit $45,000 Irrecoverable debts written off $10,000 Debts owed by customers as at 31 December 20X2 $50,000 Allowance for receivables 24% of outstanding receivables Other expenses $28,750 214 BPP LEARNING MEDIA barem lehet