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Recover Ltd had total trade debtors of 825,000 at 31 Dec 2019, and 940,000 at 31 Dec 2020. The following occurred during the year ending
Recover Ltd had total trade debtors of 825,000 at 31 Dec 2019, and 940,000 at 31 Dec 2020. The following occurred during the year ending 31 Dec 2020: (i) Recover Ltd had taken a specific provision in the accounts for the year ended 31 Dec 2019 of 16,000 being 80% of the amount owed as at 31 Dec 2019 by a customer Lazarus Limited. Lazarus repaid all their debts in full during 2020. (ii) A customer, Flatline Ltd, owed 50,000 at 31 Dec 2019 and continue to owe that amount at 31 Dec 2020. The Directors of Recover Ltd previously made a specific provision of 50% at 31 Dec 2019 but estimate that recovery will now be only 20% as at 31 Dec 2020. In addition to specific provisions, Recover Ltd adopts a general provision equal to 2% of balances that do not have specific provisions. What should be the bad and doubtful debt expense for the year ended 31 Dec 2020? Recover Ltd had total trade debtors of 825,000 at 31 Dec 2019, and 940,000 at 31 Dec 2020. The following occurred during the year ending 31 Dec 2020: (i) Recover Ltd had taken a specific provision in the accounts for the year ended 31 Dec 2019 of 16,000 being 80% of the amount owed as at 31 Dec 2019 by a customer Lazarus Limited. Lazarus repaid all their debts in full during 2020. (ii) A customer, Flatline Ltd, owed 50,000 at 31 Dec 2019 and continue to owe that amount at 31 Dec 2020. The Directors of Recover Ltd previously made a specific provision of 50% at 31 Dec 2019 but estimate that recovery will now be only 20% as at 31 Dec 2020. In addition to specific provisions, Recover Ltd adopts a general provision equal to 2% of balances that do not have specific provisions. What should be the bad and doubtful debt expense for the year ended 31 Dec 2020
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