The data presented below for Lynx Corp.is for the year ended December 31, 2016: $$\begin{array} { l r }
\text { Sales (100\% on credit) } & \$ 1,000,000 \
\text { Sales returns } & 30,000 \
\text { Accounts Receivable (December 31,2016) } & 170,000 \
\text { Allowance for Doubtful Accounts [Cr. B alance] } & \
\quad \text { (Before adjustment at December 31, 2016) } & 1,300 \
\text { Estimated amount of uncollectible accounts based on aging analysis } & 14,000
\end{array}$$
-See the data for Lynx Corp. If Lynx Corp.uses the aging of accounts receivable approach to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense?
A) $140,000
B) $156,000
C) $167,000
D) $184,000

Question

The data presented below for Lynx Corp.is for the year ended December 31, 2016: $$\begin{array} { l r } 
\text { Sales (100\% on credit) } & \$ 1,000,000 \
\text { Sales returns } & 30,000 \
\text { Accounts Receivable (December 31,2016) } & 170,000 \
\text { Allowance for Doubtful Accounts [Cr. B alance] } & \
\quad \text { (Before adjustment at December 31, 2016) } & 1,300 \
\text { Estimated amount of uncollectible accounts based on aging analysis } & 14,000
\end{array}$$
-See the data for Lynx Corp. If Lynx Corp.uses the aging of accounts receivable approach to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense?
A) $140,000
B) $156,000
C) $167,000
D) $184,000

Quizplus · Accepted Answer

The net realizable value of accounts receivable is calculated by subtracting the adjusted allowance for doubtful accounts from the accounts receivable balance. The adjusted allowance is $14,000 based on the aging analysis. Therefore, the net realizable value is $170,000 (Accounts Receivable) - $14,000 (Adjusted Allowance for Doubtful Accounts) = $156,000.

The Data Presented Below for Lynx Corp -See the Data for Lynx Corp