Ventura Co. had accounts receivable totalling $450,000 and an allowance for doubtful accounts with a balance of $5,000 on June 1, 2015. On June 2 Ventura wrote off $7,500 of uncollectible accounts. The net carrying value of accounts receivable before and after the writeoff was Before After
A) $450,000 $442,500.
B) $445,000 $442,500.
C) $445,000 $452,500.
D) $445,000 $457,500.

Question

Quizplus · Accepted Answer

Before the write-off, the net carrying value of accounts receivable would equal the total accounts receivable minus the allowance for doubtful accounts: 
$450,000 - $5,000 = $445,000. 
After the write-off, the balance of the allowance for doubtful accounts would not change, but the accounts receivable balance would decrease by the amount written off: 
$450,000 - $7,500 = $442,500. 
Therefore, the net carrying value of accounts receivable after the write-off would be: 
$442,500 - $5,000 = $437,500. 
The only answer choice that matches the net carrying value before the write-off and after the write-off is B.