A Company Has the Following Balances on December 31,2012,after Year-End

question 45

Short Answer

A company has the following balances on December 31,2012,after year-end adjustments: Accounts Receivable = $75,000; Service Revenue = $400,000; Allowance for Uncollectible Accounts = $5,000; Cash = $20,000.Calculate the net realizable value of accounts receivable.

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Definitions:

Marking To Market

This refers to the daily adjustment of accounts to reflect profits and losses in the value of securities.

Option Contract

A financial contract that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a specified date.

Derivative Security

A financial instrument whose value is based on the value of another asset.

Economic Exposure

Long-term financial risk arising from permanent changes in prices or other economic fundamentals.