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Accounts Receivable has a balance of $5,000​, and the Allowance for Bad Debts has a credit balance of $420. The allowance method is used. What is the net realizable value of Accounts Receivable after a $140 account receivable is written​ off?

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Tundexi

Answer:

Net realizable value of Accounts Receivable is $4,580

Explanation:

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

=$420 - $140

=$280

Net realizable value of accounts receivable is:

Particular                                                Amount

Accounts Receivable balance               $5000

Less: Account written off                         $140

Balance after write off                             $4860

Less: Allowance for uncollectible          

account from step 1                                  $280

Net realizable value                                $4,580

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