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12 November, 10:07

Prime Corp. has an ending balance in the accounts receivable account of $100,000. Prime recorded bad debt expense of $3,000. Prime has an ending balance in the allowance for uncollectible accounts of $7,000. What is the net accounts receivable balance

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  1. 12 November, 12:50
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    Answer: The answer is $93,000

    Explanation: From the question above, we have:

    Ending balance in the accounts receivable account = $100,000

    Prime recorded bad debt expense = $3,000

    Allowance for uncollectible accounts = $7,000

    The net realizable value of accounts receivable is calculated as:

    accounts receivable balance - allowance for uncollectible accounts

    Therefore we have:

    $100,000 - $7,000 = $93,000

    The bad debt expenses have been debited already, therefore, they are no longer part of the allowance for uncollectible accounts.
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