CAPE Management of Business Unit 1 · 2005 · Paper 1 · Question 14(a)

The Balance Sheet of Zip Manufacturers at 30 June 2002 contained the following entry: Accounts Receivable: 32,000 Less Provision for Doubtful Debts: 1,280 At 30 June 2003 the company had $42,800 in Accounts Receivable. Management decided to keep the Provision for Doubtful Debt at the same proportion to Debtors as in 2002.

Compute the amount of Provision for Doubtful Debt to be included in the Balance Sheet as at 30 June 2003.