On December 31,2016,the end of Larry's Used Cars' first year of operations,the accounts receivable was $53,600.The company estimates that $1,200 of the year-end receivables will not be collected.Accounts receivable in the 2016 balance sheet will be valued at:
A)$53,600.
B)$54,800.
C)$52,400.
D)$ 1,200.

Question

Quizplus · Accepted Answer

The company estimates that $1,200 of the $53,600 year-end receivables will not be collected. Therefore, the net realizable value (NRV) of the accounts receivables is $52,400 ($53,600 - $1,200). Therefore, accounts receivable in the 2016 balance sheet will be valued at $52,400.

On December 31,2016,the End of Larry's Used Cars' First Year