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The turnover of a company was $4 million and its receivables were 7.5% of turnover. Thecompany wishes to have an allowance of 3% of receivables,

The turnover of a company was $4 million and its receivables were 7.5% of turnover. Thecompany wishes to have an allowance of 3% of receivables, which would result in anincrease of 25% of the current allowance. What figure would appear in the income statementfor bad debts?

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