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Please help me on my accounting homework. This is my last problem in the set. Any help with details would be much appreciated! Thank you so much.
Morrison Company had credit sales of $2,500,000 during the year, its first year of business. Morrison has estimated that $50,000 of these sales on account will ultimately be uncollectible. In addition, a year-end review of accounts identified that of the $230,000 in accounts outstanding as of the end of the year, $43,000 were worthless because the business customers associated with those accounts had gone bankrupt.
Taking into account the allowance for bad debts established at the end of the year, compute the net realizable value of accounts receivable (1) before the write-off of uncollectible accounts and (2) after the write-off of uncollectible accounts.
Morrison Company had credit sales of $2,500,000 during the year, its first year of business. Morrison has estimated that $50,000 of these sales on account will ultimately be uncollectible. In addition, a year-end review of accounts identified that of the $230,000 in accounts outstanding as of the end of the year, $43,000 were worthless because the business customers associated with those accounts had gone bankrupt.
Taking into account the allowance for bad debts established at the end of the year, compute the net realizable value of accounts receivable (1) before the write-off of uncollectible accounts and (2) after the write-off of uncollectible accounts.
Help with a Net Realizable Value Accounting Question?
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