Gowns, Inc.uses the percentage of receivables basis to estimate its bad debts.At December 31, 2011, Gowns estimates total bad debts that will become uncollectible in the future as €4,456.The existing balance in the Allowance for Doubtful Accounts is a credit balance of €1,056.The Accounts Receivable balance at December 31, 2011 is €79,200.The cash realizable value of Accounts Receivable reported on the statement of financial position at December 31,2011 is

Question

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The cash realizable value of Accounts Receivable is calculated by subtracting the estimated bad debts from the Accounts Receivable balance and then adding the existing balance in the Allowance for Doubtful Accounts. 
Cash realizable value = Accounts Receivable - Estimated Bad Debts + Existing Allowance for Doubtful Accounts 
Cash realizable value = €79,200 - €4,456 + €1,056 
Cash realizable value = €74,744