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Fed [463]
3 years ago
15

M Company has the following information available before recording the adjustment at the end of the year: Accounts Receivable $8

00,000 Allowance for doubtful accounts per books before adjustment $50,000 credit Bad Debt Expense calculated using percentage of receivables method $15,000 The cash (net) realizable value of the accounts receivable at the end of the year after adjustment is Select one: a. None of the above b. $735,000 c. $685,000 d. $750,000 e. $800,000
Business
1 answer:
iren [92.7K]3 years ago
7 0

Answer:

b. $735,000

Explanation:

Bad debt Expense will be calculated using the percentage of debt loss. The expense will be calculated using the account receivable balance.

Allowance for Doubtful Accounts balance before adjustment = $50,000 Credit

Bad Debt expense based on percentage of receivables = $15,000

This adjustment will added to the balance of $50,000 to make Allowance for Doubtful Accounts ending balance equals to $65,000 ( $50,000 + $15,000 ).

Net realizable value of account receivable is the net value of Allowance for Doubtful Accounts and Account receivable.

Net Realizable value of the accounts receivable = $800,000 - $65,000 = $735,000

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3 years ago
Cullen Company has $235,000 in credit sales, and $164,200 in its Accounts Receivable at the end of the year. The company uses th
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Answer:

Net Realizablel Value of Account receivable = $142,850

Explanation:

Particulars                                                             Amount

Total Accounts Receivable                                  $164,200

- Pre-adjusted Uncollectable Account balance  $7,250

- Current Year Uncollectable Amount                 <u>$14,100   </u> ($235000*6%)

Net Realizable Value                                            <u>$142,850</u>

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2 years ago
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BabaBlast [244]

Answer:

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Intrinsic Value of the share is calculated as below.

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3 years ago
Northwestern Data Systems has adopted a new organizational approach with regard to information flow, ensuring that employees hav
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3 years ago
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