Use the following information for questions below
Bailey Inc.'s books revealed the following data for 2020 after all adjustments were made:
Cash sales &nbsp&nbsp&nbsp&nbsp&nbsp&nbsp $825,000
Sales returns (on credit sales) &nbsp&nbsp&nbsp35,000
Allowance for doubtful accounts (credit balance) &nbsp&nbsp&nbsp 3,800
Credit sales &nbsp&nbsp&nbsp575,000
Accounts receivable &nbsp&nbsp&nbsp&nbsp168,000
Bailey estimates bad debt expense based on 2% of net credit sales.
-The net carrying value of accounts receivable before the bad debt expense is recognized is
A)$156,500.
B)$164,200.
C)$168,000.
D)$171,800.

Question

Use the following information for questions below 
Bailey Inc.'s books revealed the following data for 2020 after all adjustments were made:
	Cash sales &nbsp&nbsp&nbsp&nbsp&nbsp&nbsp 	$825,000
	Sales returns (on credit sales)	&nbsp&nbsp&nbsp35,000
	Allowance for doubtful accounts (credit balance)	  &nbsp&nbsp&nbsp 3,800
	Credit sales 	&nbsp&nbsp&nbsp575,000
	Accounts receivable 	 &nbsp&nbsp&nbsp&nbsp168,000
	Bailey estimates bad debt expense based on 2% of net credit sales.
-The net carrying value of accounts receivable before the bad debt expense is recognized is
A)$156,500.
B)$164,200.
C)$168,000.
D)$171,800.

Quizplus · Accepted Answer

To find the net carrying value of accounts receivable, we need to subtract the allowance for doubtful accounts from the accounts receivable balance. The allowance for doubtful accounts has a credit balance of $3,800, so the net carrying value of accounts receivable is $168,000 - $3,800 = $164,200.

Use the Following Information for Questions Below