Question

After the accounts are adjusted and closed at the end of the fiscal​ year, accounts receivable has a balance of​ $430,000 and allowance for doubtful accounts has a balance of​ $25,000. What is the expected net realizable value of the accounts​ receivable?

a) $405,000
b) $405,500
c) $405,600
d) $405,700

Answer 1

The expected net realizable value of the accounts receivable is found by subtracting the Allowance for Doubtful Accounts from the Accounts Receivable. With balances of $430,000 and $25,000 respectively, the net realizable value is $405,000.

Step-by-step explanation:

The expected net realizable value of the accounts receivable is calculated by subtracting the Allowance for Doubtful Accounts from the Accounts Receivable balance. In this case, the Accounts Receivable has a balance of $430,000 and the Allowance for Doubtful Accounts has a balance of $25,000.

To find the expected net realizable value:

1. Start with the total Accounts Receivable: $430,000.
2. Subtract the Allowance for Doubtful Accounts: $430,000 - $25,000.
3. The result is the expected net realizable value: $405,000.

Therefore, the correct answer is a) $405,000.