Question

2018:

Issued $10,000 of common stock for cash. Provided $90,000 of services on account. Provided $33,000 of services and received cash. Collected $57,000 cash from accounts receivable. Paid $16,000 of salaries expense for the year. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 7 percent of the ending accounts receivable balance will be uncollectible. 2019: Wrote off an uncollectible account for $750. Provided $110,000 of services on account. Provided $20,000 of services and collected cash. Collected $92,000 cash from accounts receivable. Paid $30,000 of salaries expense for the year. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 7 percent of the ending accounts receivable balance will be uncollectible.

What is the net realizable value of the accounts receivable at December 31, 2018?

Answer 1

Services provided on account= $90,000

Cash received from accounts receivable = $57,000

Accounts receivable ending =  Services provided on account - Cash received from accounts receivable

= 90,000-57,000

= $33,000

Estimated uncollectibles = 7%

= 33,000 x 7%

= 2,310

Net realizable value of the accounts receivable at December 31, 2018 = Accounts receivable ending - Estimated uncollectibles

= 33,000-2,310

= $30,690

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