Question

On January 1, Year 2, the Accounts Receivable balance was $32,200 and the balance in the Allowance for Doubtful Accounts was $4,000. On January 15, Year 2, an $1,160 uncollectible account was written-off. The net realizable value of accounts receivable immediately after the write-off is:

Answer 1

$28,200

Step-by-step explanation:

The computation of the net realizable value of account receivable is shown below:

As we know that

Net realizable value is

= Account receivable balance - balance in the Allowance for Doubtful Accounts

= $32,200 - $4,000

= $28,200

we simply deduct the allowance from the account receivable balance so that net realizable value could arrive