An analysis and aging of the accounts receivable of Downs Company at December 31 revealed the following data: The cash realizable value of the accounts receivable at December 31, after adjustment, is:
A) $791,000
B) $700,000
C) $691,000
D) $591,000

Question

An analysis and aging of the accounts receivable of Downs Company at December 31 revealed the following data:  The cash realizable value of the accounts receivable at December 31, after adjustment, is:
A) $791,000 
B) $700,000 
C) $691,000 
D) $591,000

Quizplus · Accepted Answer

The calculation of the cash realizable value of the accounts receivable is:

Accounts receivable balance: $800,000
Less: Allowance for Doubtful Accounts: $9,000
Less: Write-offs: $100,000
Cash realizable value: $691,000 (Option C)

Therefore, the best choice is C as it reflects the correct cash realizable value of the accounts receivable after adjustment.

An Analysis and Aging of the Accounts Receivable of Downs