On January 1, 2014, the Accounts Receivable and the Allowance for Uncollectible Accounts for Darius Company carried balances of $20,000 and $550 respectively.During the year, the company reported $70,000 of credit sales.There were $400 of receivables written off as uncollectible in 2014.Cash collections of receivables amounted to $74,700.The company estimates that it will be unable to collect 5% of the year-end accounts receivable balance.
The net realizable value of receivables appearing on the 2014 balance sheet will amount to:

Question

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Starting balance of Accounts Receivable: $20,000
Credit sales during the year: $70,000
Total receivables: $90,000
Less: Receivables written off: $400
Less: Cash collections: $74,700
Ending balance of Accounts Receivable: $14,900

Allowance for Uncollectible Accounts:
Starting balance: $550
Ending balance: 5% of $14,900 = $745
Increase in allowance: $195

Net realizable value of receivables:
Ending balance of Accounts Receivable ($14,900) - Ending balance of Allowance for Uncollectible Accounts ($745) = $14,155