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25 October, 16:01

24. On January 15, 2015, the accounts receivable balance was $7,000 and the balance in the allowance for doubtful accounts was $700. On January 16, 2015, a $200 uncollectible account was written-off. The net realizable value of accounts receivable on January 16 immediately after the write-off is

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  1. 25 October, 18:51
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    The net realizable value is $7,000-$700 = $6,300

    The reason for this is that $700 was the the allowance for doubtful accounts and this is the amount that company does not expect to receive therefore it is subtracted from the total receivables to find the net realizable value.

    Un collectible amount is $200 which is less than $700 so it will be subtracted from 700 and then the doubtful accounts balance will be $500
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