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kennethDA19
05.05.2020 •
Business
M Company has the following information available before recording the adjustment at the end of the year: Accounts Receivable $800,000 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
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Ответ:
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
Ответ:
does this help
Explanation:
its about a teacher and what he and his fellow class found out