Using the Following Information - During 2016 Sales on Account Were $145000 and Collections

question 228

Multiple Choice

Using the following information: $$\begin{array} { l r } &\underline { 12 / 31 / 15 } \\\text { Accounts receivable } & \$ 525,000 \\\text { Allowance } &\underline { ( 40,000 ) } \\\text { Cash realizable value } & \underline { \$ 485,000 }\\\end{array}$$

- During 2016 sales on account were $145000 and collections on account were $100000. Also during 2016 the company wrote off $5000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that uncollectible accounts should be estimated at $45000. The change in the cash realizable value from the balance at 12/31/15 to 12/31/16 was a

• A) $35000 increase.
• B) $41000 increase.
• C) $30000 increase.
• D) $45000 increase.

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Definitions:

Investment

The practice of apportioning financial resources aimed at generating earnings or profits.

Private Saving

The portion of households' income that is not spent on consumption or taxes, often put aside for future use or investment.

Private Saving

The amount of income that households save after accounting for their spending and taxes.

Investment

The allocation of resources, usually financial, into assets or projects expected to yield future profits or revenue.