Asked by Timothy Robinson on Jul 20, 2024
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At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,500,000. An analysis of receivables estimates uncollectible receivables as $25,000.Determine the net realizable value of accounts receivable after adjustment. (Hint: Determine the amount of the adjusting entry for bad debt expense and the adjusted balance of Allowance for Doubtful Accounts.)
A) $550,000
B) $544,500
C) $525,000
D) $575,000
Net Realizable Value
The estimated selling price of goods minus the cost of their sale or completion.
Allowance for Doubtful Accounts
An accounting provision made by a company to account for customers who may not be able to make required payments, affecting the accounts receivable balance.
Accounts Receivable
Money owed to a company by its customers for products or services that have been delivered but not yet paid for.
- Ascertain the net realizable value of accounts receivable following adjustments for doubtful accounts.
Verified Answer
Learning Objectives
- Ascertain the net realizable value of accounts receivable following adjustments for doubtful accounts.
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