Question

An analysis and aging of the accounts receivable of Prince Company at December 31 reveals the following data.

Accounts receivable = $800,000
Allowance for doubtful accounts per books before adjustment = 50,000
Amounts expected to become uncollectible = 65,000
The cash realizable value of the accounts receivable at December 31, after adjustment, is:
a. $685,000b. $750,000c. $800,000d. $735,000

Answer 1

d. $735,000

Step-by-step explanation:

Allowance account currently has a credit balance of $50000.

Amount expected to become uncollectible is $65000

allowance account balance = $50000 + $65000

= $115,000

amount Recievable reduces = $800,000 - $65000

= $735,000

Therefore, The cash realizable value of the accounts receivable at December 31, after adjustment, is $735,000.