A sole trader's income statement for the year to 30 June 2020 shows an expense of 923
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A sole trader's income statement for the year to 30 June 2020 shows an expense of £923 in relation to bad and doubtful debts. This expense comprises:
The staff loan written off was not made for trade purposes.
(a) How much of the £923 charged to the income statement for the year should be added back when computing trading profits for tax purposes?
(b) How would this differ if the allowance for doubtful debts was a specific allowance rather than a general allowance?
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a The staff loan written off nontrade of 50 and the increase of 103 in the general ...View the full answer
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