The Miller Company earned $190,000 of revenue on account during Year 2. There was no beginning balance in the accounts receivable and allowance accounts. During Year 2, Miller collected $136,000 of cash from its receivables accounts. The company estimates that it will be unable to collect 3% of its sales on account. The net realizable value of Miller's receivables at the end of Year 2 was:

Question

Quizplus · Accepted Answer

$0 beginning balance + $190,000 revenue on account - $136,000 collections = $54,000 ending accounts receivable balance; $0 beginning balance + $5,700 uncollectible accounts expense - $0 write-offs = $5,700 ending allowance for doubtful accounts balance; $54,000 - $5,700 = $48,300 net realizable value

The Miller Company Earned $190,000 of Revenue on Account During