On January 1, 2016, the Accounts Receivable balance was $22,600 and the balance in the Allowance for Doubtful Accounts was $2,200. On January 15, 2016 an $620 uncollectible account was written-off. The net realizable value of accounts receivable immediately after the write-off is:

Question

Kayden Atkins

Business

27 March, 01:44

On January 1, 2016, the Accounts Receivable balance was $22,600 and the balance in the Allowance for Doubtful Accounts was $2,200. On January 15, 2016 an $620 uncollectible account was written-off. The net realizable value of accounts receivable immediately after the write-off is:

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Moody · Answer 1

The net realizable value of Accounts receivable is $20,400

Explanation:

The net realizable value of Accounts receivable is:

Opening receivables balance $22,600

Less doubtful debts at beginning $2,200

Net realizable value at beginning is $20,400.

Opening receivables balance $22,600

Less adjustment for uncollectible and written off debt $620

Closing receivables balance $21,980

Less doubtful debts at beginning $2,200

Adjustment to doubtful debt (based on written off debt) $620

Closing doubtful debt provision $1,580

Net realizable value at closing is $20,400.