Question

The 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 $ 800. During the year Blended wrote off uncollectible receivables of $ 2,100. Blended recorded Bad Debts Expense of $ 2,900. Blended's ​year-end balance in Allowance for Bad Debts is $ 1, 600. Blended's ending balance of Accounts Receivable is $ 19,500. Compute the net realizable value of Accounts Receivable at​ year-end.

Answer 1

$17,900

Step-by-step explanation:

Data provided in the question:

Allowance for Bad Debts at the beginning of the year = $800

Uncollectible receivables during the year = $2,100

Bad Debts Expense at the year end= $2,900

Allowance for Bad Debts at the year end = $1,600

Accounts Receivable at the year end = $19,500

Now,

Net realizable value is calculated as:

= Account receivable at the end of year - Allowance for doubtful accounts at the end of year

= $19,500 - $1,600

= $17,900