An Analysis and Aging of the Accounts Receivable of Watts

question 243

Multiple Choice

An analysis and aging of the accounts receivable of Watts Company at December 31 reveal these data: $\begin{array}{lr}\text { Accounts receivable } & \$ 2,400,000 \\\text { Allowance for doubtful accounts per books before adjustment (credit) } & 150,000 \\\text { Amounts expected to become uncollectible } & 195,000\end{array}$ What is the cash realizable value of the accounts receivable at December 31 after adjustment?

• A) $2,055,000
• B) $2,250,000
• C) $2,400,000
• D) $2,205,000

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Definitions:

Sarbanes-Oxley Act

A law passed in 2002 aimed at protecting investors from fraudulent accounting activities by corporations.

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A nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and the public interest by promoting informative, accurate, and independent audit reports.

SEC Oversight

Regulatory oversight exercised by the Securities and Exchange Commission, aiming to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

Short-Swing Profits

Profits made from the sale of company stock within any six-month period by a statutory insider.