Question

Required information [The following information applies to the questions displayed below.] Leach Inc. experienced the following events for the first two years of its operations: 2018: 1. Issued $10,000 of common stock for cash. 2. Provided $100,000 of services on account. 3. Provided $27,000 of services and received cash. 4. Collected $73,000 cash from accounts receivable. 5. Paid $18,000 of salaries expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 9 percent of the ending accounts receivable balance will be uncollectible. 2019: 1. Wrote off an uncollectible account for $730. 2. Provided $120,000 of services on account. 3. Provided $20,000 of services and collected cash. 4. Collected $102,000 cash from accounts receivable 5. Paid $26,000 of salaries expense for the year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 9 percent of the ending accounts receivable balance will be uncollectible. c. What is the net realizable value of the accounts receivable at December 31, 2018? Net realizable value

Answer 1

Working : Particulars Accounts Receivable Amount Particulars $ 100,000.00 Amount 4 $ 73,000.00 Ending Balance $ 27,000.00 Net Realisable Value at Dec 31, 2018 Accounts Receivable 12/31/2018 Less : Allowance for Doubtful accounts @9% Net Realizable value $ 27,000.00 $ (2,430.00) $ 24,570.00