Allowance for bad debt = $1000 credit balance
At the end , allowance for bad debt has $3500 debit balance and further bad debt expenses a/c is debited and allowance for bad debt account is crediter by $4500. Leaving $1000 in the credit of allowance for bad debt account.
Net realisable value of account receivables = $399000
We have proper credit balance of $1000 on allowance for bad debt account.
Therefore net realisable value of A/R = A/R - allowance for BD
= $400000-$1000
= $399000
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