Liberty Company Estimates That Its Annual Bad Debts Approximate 4

question 147

Multiple Choice

Liberty Company estimates that its annual bad debts approximate 4% of credit sales. Liberty had the following balances at year-end prior to recording adjusting entries:

Credit Sales $160,000
Trade Receivables $30 ,000
Allowance for Doubtful Accounts $100 (debit balance)

-Liberty estimates that its annual bad debts approximate 4% of credit sales. What would the net realizable value of the receivables on Liberty's year-end balance sheet be?

• A) $23,500.
• B) $23,600.
• C) $23,700.
• D) $29,900.

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