Answer:
a.
Allowance for doubtful accounts $4,127
Accounts receivable $4,127
b.
The cash realizable value of the accounts receivable before the write-off : $650,730 and after the write-off: $650,730
This is the same amount
Explanation:
a. When write-off the receivable, the amount of the Accounts receivable of Splish Brothers Inc. will reduce. The company use Allowance for doubtful accounts to write-off receiable that is not collectible.
b.
Cash realizable value is the amount of money company expect to receive from the accounts receivable after deducting the uncollectable amount.
Cash realizable value = Accounts receivable - Allowance for doubtful accounts
Before write-off:
Cash realizable value = $675,100-$24,370 = $650,730
After write-off:
Accounts receivable = $675,100-$4,127 = $670,973
Allowance for doubtful accounts = $24,370-$4,127 = $20,243
Cash realizable value = $670,973 - $20,243 = $650,730
When the company write-off, the Accounts receivable and Allowance for doubtful accounts reduce the same amount. So, the Cash realizable value is not changed after write-off (this is the same amount before and after write-off)
