Windsor uses the balance sheet approach in estimating uncollectible accounts expense, and aging the accounts receivable indicates the estimated uncollectible portion to be $7,400. The net realizable value of Windsor's accounts receivable in the January 31 balance sheet is:
A) $321,400.
B) $340,000.
C) $322,600.
D) $347,400.

Question

Quizplus · Accepted Answer

To calculate the net realizable value of the accounts receivable, we need to subtract the amount of estimated uncollectible accounts expenses from the total accounts receivable amount.

Net Accounts Receivable = Accounts Receivable - Estimated Uncollectible Accounts Expense

Net Accounts Receivable = $330,000 - $7,400

Net Accounts Receivable = $322,600

Therefore, the net realizable value of Windsor's accounts receivable in the January 31 balance sheet is $322,600. The correct answer is C.

Windsor Uses the Balance Sheet Approach in Estimating Uncollectible Accounts