Wadsworth Ltd's trade receivables at 31 December were £38,000, including an amount of £4,000 owed by Clark Ltd. However, the company was notified that Clark Ltd is being liquidated and that none of the debt owing to Wadsworth Lld will be received. Which of the following statements is true? Select one answer. Wadsworth Ltd's trade receivables at 31 December should be shown on the statement of financial position at £34,000 and no amount charged to the statement of profit or loss for bad debts Wadsworth Ltd's trade receivables at 31 December should be shown on the statement of financial position at £34,000 and £4,000 charged to the statement of profit or loss as a bad debt Wadsworth Ltd's trade receivables at 31 December should be shown on the statement of financial position at £38,000 and no amount charged to the statement of profit or loss for bad debts Wadsworth Ltd's trade receivables at 31 December should be shown on the statement of financial position at £38,000 and £4,000 charged to the statement of profit or loss as a bad debt

Wadsworth Ltd's trade receivables at 31 December were £38,000, including an amount of £4,000 owed by Clark Ltd. However, the company was notified that Clark Ltd is being liquidated and that none of the debt owing to Wadsworth Lld will be received. Which of the following statements is true? Select one answer. Wadsworth Ltd's trade receivables at 31 December should be shown on the statement of financial position at £34,000 and no amount charged to the statement of profit or loss for bad debts Wadsworth Ltd's trade receivables at 31 December should be shown on the statement of financial position at £34,000 and £4,000 charged to the statement of profit or loss as a bad debt Wadsworth Ltd's trade receivables at 31 December should be shown on the statement of financial position at £38,000 and no amount charged to the statement of profit or loss for bad debts Wadsworth Ltd's trade receivables at 31 December should be shown on the statement of financial position at £38,000 and £4,000 charged to the statement of profit or loss as a bad debt

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter6: Losses And Loss Limitations

Section: Chapter Questions

Problem 1BD

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At the end of its first year of trading a company has total trade receivables (debtors) of £20,000. The company accountant decides that there is an element of doubt about the ability of some of the trade receivables (debtors) to make payment. The accountant therefore sets up a provision for doubtful debts in the amount of £3,000. During the company's second year of trading, trade receivables (debtors) previously regarded as doubtful, in the amount of £500, succeed in making payment to the company. What is the resultant figure for trade receivables (debtors), after deducting the provision for doubtful debts, that will appear in the statement of financial position (balance sheet) of the company at the end of Year 1? a) £17,000 O b) £23,000 c) £20,000 d) £16,500
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