All Star Auto has an accounts receivable balance after posting net collections from customers for 2012 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: $\begin{array}{ll}
\$ 90,000 & \text { Current at } 2 \% \
\$ 50,000 & 1-30 \text { days past che at } 5 \% \
\$ 30,000 & 31-60 \text { days past due at } 10 \% \
\$ 10,000 & 60+\text { days past due at } 25 \%
\end{array}$ The net realizable value of the accounts receivable is

Question

Quizplus · Accepted Answer

To find the net realizable value of accounts receivable, we need to subtract the estimated uncollectible amounts from the accounts receivable balance. 
Uncollectible amount for accounts "Current": $ 90,000 × 2\% = $1,800 
Uncollectible amount for accounts "1-30 days past due": $50,000 × 5\% = $2,500 
Uncollectible amount for accounts "31-60 days past due": $30,000 × 10\% = $3,000 
Uncollectible amount for accounts "60+ days past due": $10,000 × 25\% = $2,500

Total estimated uncollectible amount = $1,800 + $2,500 + $3,000 + $2,500 = $10,800

Net realizable value of accounts receivable = $180,000 - $15,000 - $10,800 = $154,200

Therefore, the best choice is B) $170,200.

All Star Auto Has an Accounts Receivable Balance After Posting