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4 March, 20:00

Samuel, Inc. has Accounts Receivable of $200,000 and an Allowance for Doubtful Accounts of $10,000. If it writes-off a customer account balance of $1,000, what is the amount of its net accounts receivable?

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  1. 4 March, 22:54
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    Net accounts receivable is $190,000 if Samuel, Inc. writes-off a customer account balance of $1,000.

    Explanation:

    Net accounts receivable = Accounts Receivable - Allowance for Doubtful Accounts

    In Samuel, Inc., before write-off:

    Net accounts receivable = $200,000 - $10,000 = $190,000

    The company writes-off a customer account balance of $1,000 by the entry:

    Debit Allowance for Doubtful Accounts $1,000

    Credit Accounts Receivable $1,000

    Allowance for Doubtful Accounts and Accounts Receivable decrease $1,000

    Net accounts receivable after write-off = $199,000 - $9,000 = $190,000
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