Blended Company uses the allowance method to account for uncollectible receivabl

Question

Blended Company uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $ 1 comma 300. During the year Blended wrote off uncollectible receivables of $ 2 comma 000. Blended recorded Bad Debts Expense of $ 2 comma 900. Blended's year-end balance in Allowance for Bad Debts is $ 2 comma 200. Blended's ending balance of Accounts Receivable is $ 19 comma 400. Compute the net realizable value of Accounts Receivable at year-end A. $ 16 comma 500 B. $ 17 comma 400 C. $ 19 comma 400 D.

Explanation / Answer

Calculate Net realizable value :

Net realizable value = Account receivable at the end of year-Allowance for doubtful accounts at the end of year

= 19400-2200

Net realizable value = 17200

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