Hancock Medical Supply Company earned $160,000 of revenue on account during Year 1, its first year of operation. During Year 1, Hancock collected $128,000 of cash from its receivables accounts. The company did not write-off any uncollectible accounts. It estimates that it will be unable to collect 1% of revenue on account. What is the net realizable value of receivables that will be reported on the balance sheet at December 31, Year 1?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Question 8

Hancock Medical Supply Company earned $160,000 of revenue on account during Year 1, its first year of
operation. During Year 1, Hancock collected $128,000 of cash from its receivables accounts. The company did
not write-off any uncollectible accounts. It estimates that it will be unable to collect 1% of revenue on account.
What is the net realizable value of receivables that will be reported on the balance sheet at December 31, Year
1?
Multiple Choice
$32,000
$30,000
$30,400
$30,720
Transcribed Image Text:Hancock Medical Supply Company earned $160,000 of revenue on account during Year 1, its first year of operation. During Year 1, Hancock collected $128,000 of cash from its receivables accounts. The company did not write-off any uncollectible accounts. It estimates that it will be unable to collect 1% of revenue on account. What is the net realizable value of receivables that will be reported on the balance sheet at December 31, Year 1? Multiple Choice $32,000 $30,000 $30,400 $30,720
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