Question

Prime Corp. has an ending balance in the accounts receivable account of $100,000. Prime recorded bad debt expense of $3,000. Prime has an ending balance in the allowance for uncollectible accounts of $7,000. What is the net accounts receivable balance?

a. $93,000
b. $90,000
c. $107,000
d. $97,000

Answer 1

The net accounts receivable balance for Prime Corp. is calculated by subtracting the allowance for uncollectible accounts ($7,000) from the accounts receivable ($100,000), resulting in $93,000.

Step-by-step explanation:

The net accounts receivable balance of Prime Corp. can be calculated by subtracting the ending balance in the allowance for uncollectible accounts from the ending balance in the accounts receivable account. So, we take the ending balance in accounts receivable ($100,000) and subtract the balance in the allowance account ($7,000).

Net Accounts Receivable = Ending Accounts Receivable - Allowance for Uncollectible Accounts
= $100,000 - $7,000
= $93,000

Therefore, the net accounts receivable balance is $93,000, which corresponds to option (a).