The following information is related to December 31, 2016 balances. • Accounts r
ID: 2532695 • Letter: T
Question
The following information is related to December 31, 2016 balances.
• Accounts receivable $1420000
• Allowance for doubtful accounts (credit) (115000)
• Cash realizable value 1230000 During 2017 sales on account were $355000 and collections on account were $234000. Also, during 2017 the company wrote off $20900 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $144000. The change in the cash realizable value from the balance at 12/31/16 to 12/31/17 was
1. $146100 increase. 2. $169000 increase. 3. $167000 increase. 4. $192100 increase.
Explanation / Answer
1. $146100 increase
The change in the cash realizable value from the balance at 12/31/16 to 12/31/17 was a:
= $1,420,000 + $355,000 - $234,000 - $20,900 - $144,000 - $1,230,000
= $146,000 increase
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