After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $632,338 and Allowance for Doubtful Accounts has a balance of $18,648. What is the net realizable value of the accounts receivable?

Question

Allan Farmer

Business

5 December, 17:35

After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $632,338 and Allowance for Doubtful Accounts has a balance of $18,648. What is the net realizable value of the accounts receivable?

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Answers (1)

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Jazlynn Mckenzie · Answer 1

The net realizable value of the accounts receivable amounts to $613,690

Explanation:

NRV stands for Net Realizable value, which is defined as the cash amount that the firm expects to receive.

The net realizable value of the accounts receivable is computed as:

Net realizable value of the accounts receivable = Balance of Accounts Receivable - Allowance for Doubtful Accounts

where

Balance of Accounts Receivable amounts to $632,338

Allowance for Doubtful Accounts amounts to $18,648

Putting the values above:

Net realizable value of the accounts receivable = $632,338 - $18,648

Net realizable value of the accounts receivable = $613,690