The data presented below is for Mellon Corporation for the year ended December 31, 2016: $\begin{array}{lr}
\text { Sales (100\% on credit) } & \$ 1,500,000 \
\text { Sales returns } & 60,000 \
\text { Accounts Receivable (December 31, 2016) } & 250,000 \
\text { Allowance for Doubtful Accounts [Credit B al ance] (Before adjustment at December } & \
31,2016 &3,000 \
\text { Estimated amount of uncollectible accounts based on an aging analysis }&31,000\
\end{array}$
-Refer to the information for Mellon Corporation. If Mellon uses the aging of accounts receivable approach to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense?
A) $216,000
B) $219,000
C) $222,000
D) $250,000

Question

The data presented below is for Mellon Corporation for the year ended December 31, 2016: $\begin{array}{lr}
\text { Sales (100\% on credit) } & \$ 1,500,000 \
\text { Sales returns } & 60,000 \
\text { Accounts Receivable (December 31, 2016) } & 250,000 \
\text { Allowance for Doubtful Accounts [Credit B al ance] (Before adjustment at December } & \
31,2016 &3,000  \
\text { Estimated amount of uncollectible accounts based on an aging analysis }&31,000\
\end{array}$
-Refer to the information for Mellon Corporation. If Mellon uses the aging of accounts receivable approach to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense?
A) $216,000
B) $219,000
C) $222,000
D) $250,000

Quizplus · Accepted Answer

The net realizable value of accounts receivable is calculated by subtracting the adjusted allowance for doubtful accounts from the total accounts receivable. Given the accounts receivable is $250,000 and the adjusted allowance for doubtful accounts is $31,000 (based on the aging analysis), the net realizable value is $250,000 - $31,000 = $219,000.

The Data Presented Below Is for Mellon Corporation for the Year