The following information is related to December 31, 2016 balances. $1400000 (12

Question

The following information is related to December 31, 2016 balances. $1400000 (120000) 1280000 Accounts receivable Allowance for doubtful accounts (credit) Cash realizable value During 2017 sales on account were $390000 and collections on account were $230000. Also, during 2017 the company wrote off $22000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $144000. The change in the cash realizable value from the balance at 12/31/16 to 12/31/17 was $136000 increase. $160000 increase. $114000 increase. $138000 increase.

Explanation / Answer

Accounts receivable at dec 31,2017=1400000+390000-230000-22000= $1538000 Allowance for Doubtful accounts at Dec 31,2017=144000 Cash realizable value at Dec. 31,2017 = 1538000-144000=$1394000 Change in cash realizable value=1394000-1280000 = $114000 increase Option 3 is correct

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