Question

At January 1, 2019, Betty DeRose, Inc. had an allowance for bad debts with a $4,500 credit balance. During 2019, Betty wrote-off as uncollectible accounts receivable in the amount of $6,200. At December 31, 2019, Betty had total accounts receivable of $216,000 and prepared the following aging schedule: Accounts Receivable % Uncollectible not past due $100,000 1% 1-30 days past due 60,000 4% 31-60 days past due 27,000 8% 61-90 days past due 19,000 26% over 90 days past due 10,000 40% total accounts receivable $216,000 Calculate the net realizable value of Betty DeRose's accounts receivable at December 31, 2019.

Answer 1

$16,200

Step-by-step explanation:

The bad debt expense has beginning balance of $4,500. Bad debt written of during 2019 is $6,200. The total account receivable is $216,000.

$100,000 * 1% = $1000

$60,000 * 4% =$2400

$27,000 * 8% =$2160

$19,000 * 26% =$4940

$10,000 * 40% =$4000

The total of uncollected is $14,500

The bad debt of the current year is $4500 - $6200 = $1700