An analysis and aging of the accounts receivable of Downs Company at December 31 revealed the following data: $\begin{array}{lrr}
\text { Accounts Receivable } &\$800,000\
\text { Allowance for Doubtful Accounts per books } &\
\text { before adjustment (Cr.) } &50,000\
\text {Amounts expected to become uncollectible } &53,000\
\end{array}$

The cash realizable value of the accounts receivable at December 31 after adjustment is:
A) $694000.
B) $747000.
C) $750000.
D) $794000.

Question

An analysis and aging of the accounts receivable of Downs Company at December 31 revealed the following data: $\begin{array}{lrr}
  \text { Accounts Receivable } &\$800,000\
 \text { Allowance for Doubtful Accounts per books } &\
 \text { before adjustment (Cr.) } &50,000\
 \text {Amounts expected to become uncollectible  } &53,000\
\end{array}$

The cash realizable value of the accounts receivable at December 31 after adjustment is:
A) $694000.
B) $747000.
C) $750000.
D) $794000.

Quizplus · Accepted Answer

The cash realizable value is calculated by subtracting the adjusted allowance for doubtful accounts from the total accounts receivable: $800,000 - $53,000 = $747,000.

An Analysis and Aging of the Accounts Receivable of Downs