Question

Cullen Company has $235,000 in credit sales, and $164,200 in its Accounts Receivable at the end of the year. The company uses the allowance method to account for uncollectible accounts. The Allowance for Uncollectible Accounts has a $7,250 pre-adjustment credit balance. If the company estimates 6% of credit sales will be uncollectible, what will be the Net Realizable Value of its Accounts Receivable at the end of the year?

Answer 1

Net Realizablel Value of Account receivable = $142,850

Step-by-step explanation:

Particulars Amount

Total Accounts Receivable $164,200

- Pre-adjusted Uncollectable Account balance $7,250

- Current Year Uncollectable Amount $14,100 ($235000*6%)

Net Realizable Value $142,850