Net Realization Value (NRV) as of January 1 = Accounts receivable balance - balance in Allowance for Doubtful Accounts
= $ 30,600 - $ 3,700
= $ 26,900
As of January 15 = Non-billable balance = $ 1,070
Receivable balance written off = $ 1,070
So as of January 15: Accounts receivable balance - non-billable balance
= $ 30,600 - $ 1,070
= $ 29,530
: balance in Allowance for Doubtful Accounts - Receivable balances written off
= $ 3,700 - $ 1,070
= $ 2,630
Net Realization Value (NRV) as of January 15 = Accounts receivable balance - balance in Allowance for Doubtful Accounts
= $ 29,530 - $ 2,630
= $ 26,900
Thus, the Net Realization Value (NRV) as of January 15 is $ 26,900
<h2>Further Explanation
</h2>
Inventory recording is recorded based on the costs used for the inventory. However, inventory usually experiences a decrease in value because of damage, obsolescence, falling prices, etc. which causes the value of inventory to also be reduced. Therefore, inventories are reported at the lowest cost/net realizable value.
Inventory recording is divided into two, namely:
Net realizable value is the estimated selling price in normal business conditions less than the estimated costs of completion and estimated costs for sales. Then the net Realization Value can be calculated by the formula: (Accounts receivable balance - balance in Allowance for Doubtful Accounts) note: for the case above the name index is replaced but has the same meaning so the formula used is the same.
- Illustration of Lower-of-Cost-or-Net Realizable Value (LCNRV) / Lowest Cost or Net Realized Value.
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definition of Net Realization Value (NRV) brainly.com/question/12967502
meaning of Inventory recording brainly.com/question/12967502
Details
Grade: College
Subject: Business
keywords: Net Realization Value (NRV), inventory recording
