Answer:
$177,200
Explanation:
Net realizable value of the accounts receivable can be found by the following formula, which is:
Net Accounts receivables (Step3) = Closing Accounts receivables before adjustment (Step1) -/+ Increase or decrease in Allowance for doubtful debts (Step2)
Step 1: Closing Accounts receivables before adjustment
Closing Accounts receivables before adjustment is $170,000.
Step 2: Increase or decrease in Allowance for doubtful debts
Opening Allowance for Accounts receivables is $9800
Change in Allowance for doubtful debts is the difference of the Closing Allowance calculated and Opening Allowance Value in the account.
Which means:
Allowance for the Year = Closing Allowance calculated - Opening Allowance Value
Allowance for the Year = 10% of $170,000 - $9,800
Allowance for the Year = $17,000 - $9,800 = $7,200
Step 3: Net Accounts receivables
By putting the values we have:
Net Accounts Receivables = $170,000 + $7,200 = $177,200
