At 31 December 2002 a company’s receivables totalled $400,000 and an allowance for doubtful debts of $50,000
had been brought forward from the year ended 31 December 2001.

It was decided to write off debts totalling $38,000 and to adjust the allowance for doubtful debts to 10% of the
receivables.

What charge for bad and doubtful debts should appear in the company’s income statement for the year ended
31 December 2002?

A   $74,200
B   $51,800
C   $28,000
D   $24,200

D 38,000 – (50,000 – 36,200) = 24,200