Question

What is the cash realizable value if Anderson incorporated estimates that 4% of average short-term notes receivable will be uncollectible when the beginning balance is $62,000 and the year-end balance is $68,000?

O $64,600
O $59,400
O $65,400
O $70,600

Answer 1

The cash realizable value can be calculated by subtracting the estimated uncollectible amount from the year-end balance of the short-term notes receivable. In this case, the cash realizable value is $65,600.

option c is the correct

Step-by-step explanation:

The cash realizable value can be calculated by subtracting the estimated uncollectible amount from the year-end balance of the short-term notes receivable. In this case, the beginning balance is $62,000 and the year-end balance is $68,000. The estimated uncollectible amount is 4% of the average short-term notes receivable. So, we can calculate the uncollectible amount as follows:

Uncollectible Amount = 4% * ($62,000 + $68,000) / 2 = $2,400

Now, we can calculate the cash realizable value:

Cash Realizable Value = Year-End Balance - Uncollectible Amount = $68,000 - $2,400 = $65,600

Therefore, the cash realizable value is $65,600.