A transportation company, FedEx, has the following data for the year ended December 31, 2023:

• Accounts receivable: $700,000
• Estimated uncollectible accounts: 6%
• Sales: $2,500,000
• Cost of Goods Sold: $1,500,000
• Operating Expenses: $700,000
• Calculate the allowance for doubtful accounts.
• Determine the net realizable value of accounts receivable.
• How would the financial statements be affected if no allowance for doubtful accounts was recorded?
• Discuss how the Conservatism Principle affects the reporting of accounts receivable.
• How should the company record the adjustment for uncollectible accounts?