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26 September, 16:22

Accounts Receivable has a balance of $5,000 , and the Allowance for Bad Debts has a credit balance of $420. The allowance method is used. What is the net realizable value of Accounts Receivable after a $140 account receivable is written off?

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  1. 26 September, 16:24
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    Net realizable value of Accounts Receivable is $4,580

    Explanation:

    Balance in allowance for uncollectible account = Balance before write off - Account written off

    =$420 - $140

    =$280

    Net realizable value of accounts receivable is:

    Particular Amount

    Accounts Receivable balance $5000

    Less: Account written off $140

    Balance after write off $4860

    Less: Allowance for uncollectible

    account from step 1 $280

    Net realizable value $4,580
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