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A Level Accounting (9706)•9706/13/O/N/22
Question 10 from 9706/13/O/N/22

Explanation

Insufficient information to calculate net trade receivables

Steps:

  • Calculate opening gross trade receivables: net = 153,000=96153,000 = 96% of gross, so gross = 153,000=96153,000 ÷ 0.96 = $159,375.
  • Opening provision = 4% × 159,375=159,375 = 159,375=6,375.
  • Closing provision = 6,375+6,375 + 6,375+9,000 = $15,375.
  • Closing net = closing gross - $15,375, but closing gross is not provided.

Why C is correct:

  • Not enough information; closing gross trade receivables required but missing.

Why the others are wrong:

  • A: Assumes unrelated adjustment, e.g., small gross increase.
  • B: Possible miscalculation using approximate percentages.
  • D: Assumes simple addition without accounting for provision impact.

Final answer: Not enough information.

Topic: Preparation of financial statements

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