Final answer:
The cash realizable value of Blossom Company's accounts receivable at December 31, after adjusting the allowance for doubtful accounts to the new expected uncollectible amount, is $2,829,000. This is calculated by subtracting the adjusted allowance ($481,000) from the total accounts receivable ($3,310,000).
Step-by-step explanation:
The cash realizable value of the accounts receivable is the amount that the Blossom Company expects to collect in cash from its receivables. To calculate this amount, you subtract the allowance for doubtful accounts from the total accounts receivable. In this scenario, the company's accounts receivable is $3,310,000 and the new allowance for doubtful accounts, after adjustment, is $481,000.
The adjustment to the allowance for doubtful accounts is found by comparing the expected uncollectible amount with the existing allowance. This requires an increase or decrease in the allowance.
The existing allowance for doubtful accounts is a credit balance of $410,000, and the company expects $481,000 to become uncollectible. Therefore, to adjust the allowance to the expected uncollectible amount, increase the allowance by $71,000 ($481,000 - $410,000).
After this adjustment, the cash realizable value of the accounts receivable is calculated as follows:
Total Accounts Receivable - Adjusted Allowance for Doubtful Accounts = Cash Realizable Value
$3,310,000 - $481,000 = $2,829,000
Therefore, after the adjustment, the cash realizable value of the accounts receivable at December 31 is $2,829,000.