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:

Question

Business

Xiomara Collins

3 October, 01:26

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:

+2

Answers (1)

Know the Answer?

Bradley · Answer 1

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