Question

An analysis and aging of the accounts receivable of hugh company at december 31 revealed the following data with all accounts having a normal balance: accounts receivable $900,000 allowance for doubtful accounts per books before adjustment 50,000 amounts expected to become uncollectible 56,000 the cash realizable value of the accounts receivable at december 31, after adjustment, is: group of answer choices

-$794,000.
-$844,000.
-$850,000.
-$894,000.

Answer 1

The cash realizable value of Hugh Company's accounts receivable after adjustment is $844,000, which is calculated by subtracting the estimated uncollectible amount of $56,000 from the total accounts receivable of $900,000.

Step-by-step explanation:

The analysis and aging of the accounts receivable of Hugh Company at December 31 revealed the following data: Accounts Receivable totaled $900,000, there was an existing Allowance for Doubtful Accounts with a balance of $50,000, and amounts expected to become uncollectible were estimated at $56,000.

To determine the cash realizable value of the accounts receivable after adjustment, we would subtract the revised estimate for uncollectible accounts from the total Accounts Receivable. The revised allowance is $56,000, as derived from the uncollectible estimate. Therefore, the cash realizable value is calculated as follows: $900,000 - $56,000 = $844,000.