Question

Bend Company uses the allowance method to account for uncollectible receivables. At the beginning of the​ year, Allowance for Bad Debts had a credit balance of $ 900. During the year Bend wrote off uncollectible receivables of $ 2 comma 200. Bend recorded Bad Debts Expense of $ 3 comma 400. Bend's ​year-end balance in Allowance for Bad Debts is $ 2 comma 100. Bend's ending balance of Accounts Receivable is $ 19 comma 800. Compute the net realizable value of Accounts Receivable at​ year-end.

Answer 1

$17,700

Step-by-step explanation:

The computation of the net realizable value of Accounts Receivable at​ year-end is shown below:

= Ending balance of Accounts Receivable - year-end balance in Allowance for Bad Debts

= $19,800 - $2,100

= $17,700

Simply we deducted the year-end balance in Allowance for Bad Debts from the ending balance of accounts receivable and the same is presented in the currents asset side of the balance sheet.