Question

Before year-end adjusting entries, Crane Company's account balances at December 31, 2017, for accounts receivable and the related allowance for uncollectible accounts were $1400000 and $75000, respectively. An aging of accounts receivable indicated that $120000 of the December 31 receivables are expected to be uncollectible. The net realizable value of accounts receivable after adjustment is

Answer 1

$1,280,000

Step-by-step explanation:

The net realizable value of accounts receivable after the net adjustment is computed as

= Ending balance in Accounts receivables - Uncollectible ageing accounts receivables

Given that;

Ending balance in Accounts receivables = $1,400,000

Uncollectible ageing accounts receivables = $120,000

Net realizable value of the accounts receivables after the net adjustment = $1400,000 - $120,000

= $1,280,000