Question

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?

Answer 1

Net realizable value of Accounts Receivable is $4,580

Step-by-step 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