Question T (or25 Carson Company began operations on February 1,2016, and experie

Question

Question T (or25 Carson Company began operations on February 1,2016, and experienced the following events durting the year 1 Eamed $150,000 of revenue on account 2. Collected $125,000 cash from accounts recelvable 3 Paid $55,000 cash for salarnes expense 4 Adjusted the accounting records to reflect management's belef that $3,000 of the accounts recelvable balance would be uncollectible. Carson uses the allowance method of accounting for bad debts What is Carson Company's net realizable value of the accounts receivable at the end of 2016? $ 22,000 $ 25,000 o $95.000 O s150000

Explanation / Answer

Calculate net realizable value :

so answer is a) $22,000

Credit sales 150000 Less: Collection on account (125000) Account receivable 25000 Less: Allowance for uncollectible accounts (3000) Net realizable value 22000

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