The data presented below are for Falconi,Inc.for 2017.
$\begin{array}{lr}
\text { Credit sales during the year } & \$ 2,100,000 \
\text { Accounts receivable-December } 31,2017 & 395,000 \
\text { Allowance for doubtful accounts-December } 31,2017 & 20,000 \
\text { Bad debts expense for the year } & 17,000
\end{array}$

-What amount will Falconi show on its year-end balance sheet for the net realizable value of its accounts receivable?
A)$378,000
B)$375,000
C)$358,000
D)$ 20,000

Question

The data presented below are for Falconi,Inc.for 2017.  
$\begin{array}{lr}
\text { Credit sales during the year } & \$ 2,100,000 \
\text { Accounts receivable-December } 31,2017 & 395,000 \
\text { Allowance for doubtful accounts-December } 31,2017 & 20,000 \
\text { Bad debts expense for the year } & 17,000
\end{array}$
 
-What amount will Falconi show on its year-end balance sheet for the net realizable value of its accounts receivable?
A)$378,000
B)$375,000
C)$358,000
D)$ 20,000

Quizplus · Accepted Answer

The net realizable value of accounts receivable is calculated as the accounts receivable balance minus the allowance for doubtful accounts. In this case, Falconi has an accounts receivable balance of $400,000 and an allowance for doubtful accounts of $25,000, so the net realizable value is $375,000 (option B).

The Data Presented Below Are for Falconi,Inc -What Amount Will Falconi Show on Its Year-End Balance Sheet