Before Adjusting Entries, Clark's Accounts Receivable and Allowance for Doubtful

question 57

Essay

Before adjusting entries, Clark's accounts receivable and allowance for doubtful accounts are $42,000 and $300 (credit balance), respectively. Clark determined that 0.4% of net sales would probably be uncollectible. Sales during the year were $500,000 and sales returns amounted to $6,000. Calculate the net realizable value of accounts receivable on Clark's balance sheet at year-end.

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Definitions:

Recall

The act of retrieving information or memories from one's past experiences, without being cued.

Priming

A phenomenon in psychology where exposure to one stimulus influences a response to a subsequent stimulus, without conscious guidance or intention.

Ambulance

A vehicle equipped for transporting emergency personnel and patients in need of urgent medical care to and from healthcare facilities.

Serious Illness

Health conditions that have a significant impact on a person’s daily life, potentially life-threatening and requiring complex care.