Answer:
$25,000
Explanation:
Given that,
Accounts receivable:
Beginning balance 1 September = $22,400
Services on account = $45,000
Cash collected = $34,400
Written off accounts = $2,000
Allowance For Doubtful accounts:
Beginning balance 1 September = $4,400
Adjusted balance for Accounts receivables on 30 Sept
ember:
= Beginning balance 1 September + Services on account - Cash collected - Written off accounts
= $22,400 + $45,000 - $34,400 - $2,000
= $31,000
Adjusted balance for Allowance For Doubtful accounts on 30 Sept
ember:
= Beginning balance 1 September - Written off accounts + Bad Debt Expense
= $4,400 - $2,000 + ($45,000 × 8%)
= $4,400 - $2,000 + $3,600
= $6,000
Therefore, the September 30th net realizable value of Accounts Receivable is calculated as follows:
= Accounts receivables – Allowance for Doubtful accounts
= $31,000 - $6,000
= $25,000
