A company has the following information for the year 2015. Accounts Receivables, beginning of the year USD 420, 000 Accounts Receivable, year ending, before any write-off USD 490, 000 Allowance for Doubtful Accounts, beginning of the year USD 15, 000 Sales for the Year Ended Dec 31, 2015 USD 1, 650, 000 If the company wrote off USD 13,000 in uncollectible receivables in 2015 and estimated bad debts to be USD 27, 000 for the year 2015 using the allowance method (this amount is the balance of Allowance for Doubtful Accounts for the year ending December 31, 2015), what is the cash realizable value of the AR?
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
A company has the following information for the year 2015.
|
Accounts Receivables, beginning of the year |
USD 420, 000 |
|
|
USD 490, 000 |
|
Allowance for Doubtful Accounts, beginning of the year |
USD 15, 000 |
|
Sales for the Year Ended Dec 31, 2015 |
USD 1, 650, 000 |
If the company wrote off USD 13,000 in uncollectible receivables in 2015 and estimated
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