Answer:
The net realizable value of receivables appearing on the 2009 balance sheet is $14,250
Explanation:
First, we need to calculate the balance of account receivables
Ending balance = Beginning Balance + Credit sales - Cash collected - Bad debt written off
Where
Beginning Balance = $20,000
Credit sales = $100,000 x ( 100% - 30% ) = $70,000
Cash collected = $74,550
Bad Debt written off = $550
Placing values in the formula
Ending balance = $20,000 + $70,000 - $74,550 - $550 = $14,900
Now, we need to calculate the balance of allowance for doubtful accounts as follow
Ending Balance = Beginning balance + Bad debt Expense - Bad debt written off
Where
Beginning balance = 500
Bad debt expense = $70,000 x 1% = $700
Bad debt written off = $550
placing values in the formula
Ending Balance = $500 + $700 - $550 = $650
Now calculate the balance of realizable value of account receivables as follow
Net realizable value of receivables = Ending balance of receivables - Ending balance of allowance for doubtful accounts = $14,900 - $650 = $14,250
