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Accounts Receivable has a balance of $6,000, and the Allowance for Bad Debts has a credit balance of $400. The allowance method is used. What is the net realizable value of Accounts Receivable after a $150 account receivable is written off

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ayokenny2001

Answer:

Net realizable value of accounts receivable is $5,600

Explanation:

Balance in allowance for uncollectible account = Balance before write off - Account written off

= $400 - $150

= $250

Net realizable value of accounts receivable is therefore;

Accounts receivable balance

$6,000

Less: Account written off

$150

Balance after write off

$5,850

Less : Allowance for uncollectible account

$250

Net realizable value

$5,600