At the end of the current year,Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,500,000.An analysis of receivables estimates uncollectible receivables as $25,000. Determine the net realizable value of accounts receivable after adjustment.Hint: Determine the amount of the adjusting entry for bad debt expense and the adjusted balance of Allowance of Doubtful Accounts.
A)$550,000
B)$544,500
C)$525,000
D)$575,000

Question

Quizplus · Accepted Answer

The net realizable value is calculated as Accounts Receivable ($550,000) minus the adjusted Allowance for Doubtful Accounts ($25,000), resulting in $525,000.

At the End of the Current Year,Accounts Receivable Has a Balance