A2Z Events The following data are from the company's records for 2012:
$\begin{array}{ll}
\text {Credit sales during the year } &\$ 2,400,000 \
\text {Accounts Receivable-December 31, 2012} &410,000 \
\text {Allowance for Doubtful Accounts-December 31, 2012 } &55,000\
\text {Bad debt expense for the year } &70,000
\end{array}$
-Refer to A2Z Events.What amount will the company show on its year-end balance sheet for the net realizable value of its accounts receivable?

Question

A2Z Events The following data are from the company's records for 2012:
$\begin{array}{ll}
 \text {Credit sales during the year } &\$ 2,400,000 \
 \text {Accounts Receivable-December 31, 2012} &410,000 \
 \text {Allowance for Doubtful Accounts-December 31, 2012 } &55,000\
 \text {Bad debt expense for the year } &70,000
\end{array}$ 
-Refer to A2Z Events.What amount will the company show on its year-end balance sheet for the net realizable value of its accounts receivable?

Quizplus · Accepted Answer

The net realizable value of accounts receivable will be the difference between the accounts receivable balance and the allowance for doubtful accounts. 
Net Realizable Value = Accounts Receivable - Allowance for Doubtful Accounts 
Net Realizable Value = $410,000 - $55,000 
Net Realizable Value = $355,000 
Therefore, the correct answer is (D) $355,000.

A2Z Events the Following Data Are from the Company's Records