Hancock Medical Supply Co. ,which had no beginning balance in its Accounts Receivable and Allowance for Doubtful Accounts,earned $160,000 of revenue on account during 2016.During 2016,Hancock collected $128,000 of cash from its receivables accounts.The company estimates that it will be unable to collect 1% of revenue on account.The amount of net realizable value of receivables on the December 31,2016 balance sheet would be:

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The net realizable value of receivables is the amount of revenue that is expected to be collected from accounts receivable. It is calculated by deducting the estimated uncollectible amount from the gross accounts receivable balance. In this case, the gross accounts receivable balance is $160,000 and the estimated uncollectible amount is $1,600 (1% of $160,000). Therefore, the net realizable value of receivables is $158,400.