All Star Auto
All Star Auto has an accounts receivable balance after posting net collections from customers of $180,000. The customers took advantage of sales discounts of $15,000. Management aged the accounts receivable and estimate for uncollected account percentages as follows:
$\begin{array}{ll}
\$ 90,000 & \text { Current at } 2 \% \
\$ 50,000 & 1-30 \text { days past due at } 5 \% \
\$ 30,000 & 31-60 \text { days past due at } 10 \% \
\$ 10,000 & 60+\text { days past due at } 25 \%
\end{array}$
-Refer to the figure All Star Auto.What is the net realizable value of the accounts receivable?

Question

All Star Auto
All Star Auto has an accounts receivable balance after posting net collections from customers of $180,000. The customers took advantage of sales discounts of $15,000. Management aged the accounts receivable and estimate for uncollected account percentages as follows:
 $\begin{array}{ll}
\$ 90,000 & \text { Current at } 2 \% \
\$ 50,000 & 1-30 \text { days past due at } 5 \% \
\$ 30,000 & 31-60 \text { days past due at } 10 \% \
\$ 10,000 & 60+\text { days past due at } 25 \%
\end{array}$
-Refer to the figure All Star Auto.What is the net realizable value of the accounts receivable?

Quizplus · Accepted Answer

The net realizable value of the accounts receivable is calculated by subtracting the estimated uncollectible amounts from the total accounts receivable balance. The estimated uncollectible amounts are: $90,000 * 2% = $1,800; $50,000 * 5% = $2,500; $30,000 * 10% = $3,000; $10,000 * 25% = $2,500. The total estimated uncollectible amount is $1,800 + $2,500 + $3,000 + $2,500 = $9,800. Therefore, the net realizable value is $180,000 (total accounts receivable) - $9,800 (estimated uncollectible) = $170,200.

All Star Auto All Star Auto Has an Accounts Receivable

All Star Auto
All Star Auto Has an Accounts Receivable