Question

An analysis and aging of Jay Co.’s accounts receivable at December 31 disclosed the following:Accounts receivable $900,000 Allowance for uncollectible accounts, per books 50,000 Amounts deemed uncollectible 64,000 The net realizable value of the accounts receivable at December 31 should be _____

Answer 1

Net Realizable balance of accounts receivables = $836,000

Step-by-step explanation:

As for the provided information, we have:

Balance of accounts receivables = $900,000

This balance represents the total amount which is to be received by the company from the debtors as debtors owe this amount to company.

Allowance for un-collectible receivables = $50,000

This balance clearly represents the amount which the company will not be able to collected and this is now accounted for, through a credit account allowance for un-collectible receivables.

Further it is provided that, the deeming amount of un-collectibles = $64,000.

Now this shall clearly represent the net and final amount which the company would not be able to collect. The above balance of $50,000 is un-adjusted balance.

Therefore, net collectible or we can say realizable balance of accounts receivables = $900,000 - $64,000 = $836,000.