Accounts Receivable has a balance of $4000,and the Allowance for Bad Debts has a credit balance of $430.The allowance method is used.What is the net realizable value of Accounts Receivable after a $170 account receivable is written off?
A) $3400
B) $3740
C) $3570
D) $4000

Question

Quizplus · Accepted Answer

The net realizable value of Accounts Receivable after the write-off can be calculated as follows:

Accounts Receivable balance = $4,000
Less: Amount written off = $170
Adjusted Accounts Receivable balance = $3,830

Allowance for Bad Debts balance = $430 (credit balance)
Less: Amount of write-off = $170
Adjusted Allowance for Bad Debts balance = $260 (credit balance)

Net realizable value of Accounts Receivable = Adjusted Accounts Receivable balance - Adjusted Allowance for Bad Debts balance
= $3,830 - $260
= $3,570

Therefore, the correct answer is C.

Accounts Receivable Has a Balance of $4000,and the Allowance for Bad