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28 August, 09:48

he Miller Company recognized $123,000 of service revenue earned on account during Year 2. There was no beginning balance in the accounts receivable and allowance accounts. During Year 2, Miller collected $82,000 of cash from accounts receivable. The company estimates that it will be unable to collect 3% of its sales on account. The net realizable value of Miller's receivables at the end of Year 2 was:

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  1. 28 August, 10:31
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    The net realizable value of Miller's receivables at the end of Year 2 was $37,310

    Explanation:

    In order to calculate The net realizable value of Miller's receivables at the end of Year 2 we would have to calculate first the uncollectible receivables as follows:

    uncollectible receivables=$123,000*3%

    uncollectible receivables=$3,690

    Therefore, Receivables at end=$123,000-$82,000-$3,690

    Receivables at end=$37,310

    The net realizable value of Miller's receivables at the end of Year 2 was $37,310
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