Question

An analysis and aging of the accounts receivable of Raja Company at December 31 reveal the following data:

Accounts receivable $800,000
Allowance for doubtful accounts balance before adjustment (credit) 12,000
Amounts expected to become uncollectible 65,000
How much is the cash (net) realizable value of the accounts receivable at December 31, after adjustment?

Answer 1

The cash (net) realizable value of the accounts receivable is accounts receivable less the ending balance in the Allowance for Doubtful Accounts.

800,000 - 65,000

This brings the total to $735,000.