Question

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 100. During the year Brinkman wrote off uncollectible receivables of $ 1 comma 900. Brinkman recorded Bad Debts Expense of $ 3 comma 300. Brinkman's ​year-end balance in Allowance for Bad Debts is $ 2 comma 500. Brinkman's ending balance of Accounts Receivable is $ 19 comma 300. Compute the net realizable value of Accounts Receivable at​ year-end. A. $ 16 comma 800 B. $ 17 comma 400 C. $ 19 comma 300 D. $ 16 comma 000

Answer 1

A. $ 16 comma 800

Step-by-step explanation:

The computation of the net realizable value of the account receivable at the year end is shown below:

Net realizable value = Account receivable - allowance for bad debt

= $19,300 - $2,500

= $16,800

We simply deduct the allowance for doubtful debt from the account receivable so that the net realizable value of the account receivable could come