Ace Computing Company on January 1, Year 1, the Accounts Receivable and the Receivable

question 35

Multiple Choice

Ace Computing Company
On January 1, Year 1, the accounts receivable and the allowance for doubtful accounts carried balances of $40,000 and $1,500 respectively. During the year, the company reported $80,000 of credit sales. There were receivables of $500 written off as uncollected in Year 1. Cash collections of receivables amounted to $78,200. The company estimates that it will be unable to collect 4% of the year-end accounts receivable balance.
-Refer to the figure Ace Computing Company.What will be the net realizable value of receivables appearing on the Year 1 balance sheet?

• A) $39,648
• B) $39,800
• C) $40,648
• D) $41,300

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Definitions:

Quantity Demanded

The amount of a good or service that consumers are willing and able to purchase at a specific price.

Price

The amount of money required to purchase a good or service, determined by factors such as supply and demand.

Normal Good

A type of good for which demand increases when income increases, demonstrating a direct relationship between income and demand.

Consumer Incomes

The total earnings received by consumers, including wages, dividends, and other sources of income.