Question

Jake Company records bad debt expense using the net credit sales method and has estimated that 5.5% of its credit sales will prove to be uncollectible. During 2019, Jake Company reported net credit sales of $120,000 and collected $150,000 cash from its credit customers. The $150,000 includes a $6,000 recovery of an account receivable written off in the previous year. During 2019, Jake Company wrote-off as uncollectible accounts receivable of $4,000. Jake Company reported accounts receivable at January 1, 2019, of $88,000 and the allowance for doubtful accounts had an $8,000 credit balance at January 1, 2019.
Calculate the net realizable value of Jake Company's accounts receivable at December 31, 2019.
Please include your calculations and explanation.

Answer 1

Answer:

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