Larry Kordoski owns a clothing store that has a $31,000 balance in Accounts Receivable and a $1,600 balance in Allowance for Bad Debts. Required: 1. Determine the net realizable value of the accounts receivable. Net realizable value = $ 2. Assume that an account receivable in the amount of $350 was written off using the allowance method. Determine the net realizable value of the accounts receivable after the write off. Net realizable value = $
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.
Larry Kordoski owns a clothing store that has a $31,000 balance in
Required:
1. Determine the net realizable value of the accounts receivable.
Net realizable value = $
2. Assume that an account receivable in the amount of $350 was written off using the allowance method. Determine the net realizable value of the accounts receivable after the write off.
Net realizable value = $
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