The amount of money an item may bring in overall upon sale, less an estimate of the charges, fees, and taxes related to that sale or disposal, is what is known as the asset's "net realisable value" (NRV).
<h3>What is Net realizable value?</h3>
The amount of money an item may bring in overall upon sale, less an estimate of the charges, fees, and taxes related to that sale or disposal, is what is known as the asset's "net realisable value" (NRV). This valuation approach is frequently used in inventory accounting. In the world of accounting, net realisable value is a way to calculate how much a fixed or current asset is worth when it is kept in stock.
The cash sum that a corporation anticipates receiving is known as net realisable value (NRV). Consequently, net realisable value is also known as cash realisable value. The terms "net realisable value" and "current assets" are frequently used in relation to inventory and accounts receivable.
$24,900 - $760 = $24,140 accounts receivable balance after the write-off.
$2,600 - $760 = $1,840 allowance balance after the write-off.
$24,140 - $1,840 = $22,300 net realizable value after the write-off.
The complete question is,
On January 1, Year 2, the Accounts Receivable balance was $24,900 and the balance in the Allowance for Doubtful Accounts was $2,600. On January 15, Year 2, an $760 uncollectible account was written-off. The net realizable value of accounts receivable immediately after the write-off is:
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