Part IV. Clark Co. had a balance of $100,000 in Accounts Receivable and a balanc

Question

Part IV. Clark Co. had a balance of $100,000 in Accounts Receivable and a balance of $1,000 (normal balance) in Allowance for Doubtful Accounts on March 1, 2018 before writing off an account. 1. What is the net realizable value of the accounts receivable before the write-off? 2. Now assume that Clark writes off Marston Company's account that has a balance of $150. (Hint: Make the entry. Questions often require you to know the effects of a journal entry even though they do not ask you to make the journal entry.) The balance in Accounts Receivable after the write-off is posted is $ a. b. The balance in Allowance for Doubtful Accounts after the write-off is posted is c. The net realizable value of the accounts receivable after the write-off is posted is

Explanation / Answer

1 Net realizable value = 100000-1000 = $99000 2 Allowance for Doubtful accounts 150           Accounts Receivable 150 a Balance in Accounts Receivable=100000-150 = $99850 b Balance in Allowance for Doubtful accounts=1000-150=$850 c Net realizable value =99850-850=$99000

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