SB Inc. had net sales in 2019 of $700,000. At Dec. 31, 2019, the following information was listed which was about the balances in selected accounts before adjusting entries:
Accounts receivable debit balance: $160, 000
Allowance for doubtful accounts credit balance: $1,200
Estimated uncollectable receivable: 2% of net accounting receivable
At Dec. 31, 2019, on the statement of financial position, what is the cash realizable value of the receivables?
-> $158,024
My solving process:
Accounts receivable debit balance - Allowance for doubtful accounts credit balance = net accounting receivable
160,000 - 1,200 = 158,800
2% of net accounting receivable = 3,176
uncollectable receivable > Allowance for doubtful accounts credit balance
difference: - $1,976
160,000 - 1,976 = 158,024
Is it right?