Aurora Co.had Accounts Receivable totalling $450,000 and an Allowance for Doubtful Accounts with a balance of $5,000 on December 1,2020.On December 2 Aurora wrote off $7,500 of uncollectible accounts.The net carrying value of Accounts Receivable before and after the writeoff was Before &nbsp&nbsp &nbsp &nbsp &nbsp &nbsp &nbsp After
A)$450,000 &nbsp &nbsp &nbsp$442,500.
B)$445,000 &nbsp &nbsp &nbsp$445,000.
C)$445,000 &nbsp &nbsp &nbsp$452,500.
D)$445,000 &nbsp &nbsp &nbsp$457,500.

Question

Aurora Co.had Accounts Receivable totalling $450,000 and an Allowance for Doubtful Accounts with a balance of $5,000 on December 1,2020.On December 2 Aurora wrote off $7,500 of uncollectible accounts.The net carrying value of Accounts Receivable before and after the writeoff was Before &nbsp&nbsp &nbsp &nbsp &nbsp &nbsp &nbsp  After
A)$450,000 &nbsp &nbsp &nbsp$442,500.
B)$445,000 &nbsp &nbsp &nbsp$445,000.
C)$445,000 &nbsp &nbsp &nbsp$452,500.
D)$445,000 &nbsp &nbsp &nbsp$457,500.

Quizplus · Accepted Answer

Before the write-off, the net carrying value of Accounts Receivable is $450,000 (Accounts Receivable) - $5,000 (Allowance for Doubtful Accounts) = $445,000. After writing off $7,500, the Allowance for Doubtful Accounts is used to absorb the loss, so the net carrying value remains $445,000. The write-off reduces the Allowance for Doubtful Accounts but does not affect the net carrying value of Accounts Receivable.

Aurora CoHad Accounts Receivable Totalling $450,000 and an Allowance for Doubtful