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At the end of its first trading period after commencing business, Khan & Co has a receivables balance of $500,000. It wishes to provide a specific allowance on a debt of $10,000. (The customer that owes this $10,000 is in severe financial difficulty, it is unlikely any of this $10,000 will be recovered). Khan & Co also wishes to set up a general allowance of 2%. What is the charge to the income statement? A. $10,000 B. $19,800 C. $20,000 D. $9,800 |