An analysis of Prince Company's accounts receivable as of December 31 shows the following data: - Accounts receivable: $800,000 - Allowance for doubtful accounts before adjustment: $50,000 - Expected uncollectible amounts: $65,000 The adjusted cash realizable value of the accounts receivable as of December 31 is: a. $685,000 b. $750,000 c. $800,000 d. $735,000

Business · High School · Thu Feb 04 2021

Answered on

The cash realizable value of the accounts receivable is the amount of money that the company expects to actually collect from its customers. To find this value, we adjust the total accounts receivable for the expected uncollectible amounts.

Here's how to calculate it:

1. Start with the total accounts receivable: $800,000 2. Subtract the updated allowance for doubtful accounts (the amounts expected to become uncollectible): $65,000

So, the calculation is $800,000 - $65,000 = $735,000.

Therefore, the cash realizable value of the accounts receivable after adjustment is $735,000. The correct answer is d. $735,000.

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