Question

The accounts receivable balance is $1,000,000. After adjustment, the allowance for uncollectible account balance is $40,000. Net Sales were $12,000,000. What is the net realizable value (book value) of the receivables?

Answer 1

Answer:

$960,000

Explanation:

The computation of the  net realizable value (book value) of the receivable is shown below:

= Balance of accounts receivable - the balance of allowance for uncollectible account

= $1,000,000 - $40,000

= $960,000

Simply we deduct the balance of allowance for an uncollectible account from the Balance of accounts receivable so that the correct amount can come.  

All other information which is given is not relevant. Hence, ignored it