Question

Accounts Receivable has a $2,300 balance, and the Allowance for Doubtful Accounts has a $200 credit balance. An $80 account receivable is written-off. Net receivables (net realizable value) after the write-off equals:
A) $2,020.
B) $2,100.
C) $2,220.
D) $2,180.

Answer 1

Answer:

The net realizable value after the write-off equals is;

B). $2,100

Explanation:

Since and amount of $80 has been written off, this means that this amounts needs to be debited from the accounts receivable while at the same time debiting the accounts credit balance. To determine the net receivables, we can form the expression below;

N=(R-W)-(C-W)

where;

N=net realizable value

R=accounts receivable

W=written off accounts receivables

C=credit balance

In our case;

N=unknown

R=$2,300

W=$80

C=$200

replacing;

N=(2,300-80)-(200-80)

N=(2,220-120)=2,100

N=$2,100

The net realizable value after the write-off equals=$2,100