During the year,Liptom Company made an entry to write off a $4,000 uncollectible account.Before this entry was made,the balance in accounts receivable was $60,000 and the balance in the allowance account was $4,500 (normal balance).What is the net realizable value of accounts receivable after the write-off entry?
A)$60,000
B)$59,500
C)$55,500
D)$51,500

Question

Quizplus · Accepted Answer

The net realizable value of accounts receivable is calculated as Accounts Receivable minus the Allowance for Doubtful Accounts. Before the write-off, the net realizable value is $60,000 - $4,500 = $55,500. The write-off of $4,000 reduces both Accounts Receivable and the Allowance for Doubtful Accounts by $4,000, keeping the net realizable value unchanged at $55,500.

During the Year,Liptom Company Made an Entry to Write Off