At the End of the Current Year, Accounts Receivable Has

question 170

Essay

At the end of the current year, Accounts Receivable has a balance of $900,000, the Allowance for Uncollectible Accounts has a debit balance of $1,000 and net credit sales for the year are $3,000,000. Using the aging-of-receivables method, the balance of Allowance for Uncollectible Accounts is estimated at $30,000.
Required:
Determine the net realizable value of accounts receivable at the end of the year.

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Definitions:

Negative Earnings

A financial situation where a company's expenses exceed its revenues, leading to a net loss in its income statement.

Prop Up Earnings

Tactics used by companies to artificially inflate or support their reported earnings per share (EPS) without a real increase in profitability.

Slightly Positive

Referring to a modestly favorable outcome or result, often used in the context of financial results or economic indicators.

Capacity Swaps

Capacity swaps involve the exchange of production capacity or output between companies, usually to meet demand or manage surplus without the exchange of monetary payment.