At January 1, 2024, ABC Company reported an allowance for bad debts with a $7,190 credit balance. During 2024, ABC wrote-off as uncollectible accounts receivable totaling $12,530. At December 31, 2024, ABC Company had accounts receivable totaling $325,000 and prepared the following aging schedule: Accounts Receivable not past due 1-39 days past due 40-79 days past due 80-119 days past due over 119 days past due total $167,000 $ 52,000 $ 69,000 $ 26,000 $ 11,000 $325,000 %Uncollectible 2% 8% 14% 22% 45% Calculate the net realizable value of ABC Company's accounts receivable at December 31, 2024.
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.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
