Question
Arlington Co. began 2023 with $120,000 in A/R and $3,600 (credit balance) in ADA. During 2023 Arlington made $740,000 in credit sales and received $625,000
Arlington Co. began 2023 with $120,000 in A/R and $3,600 (credit balance) in ADA. During 2023 Arlington made $740,000 in credit sales and received $625,000 in cash from customers. During the year, Arlington factored $100,000 of A/R to a finance company to generate cash to pursue a business opportunity. Arlington wrote off $3,400 in receivables during the year and recovered receivables previously written off in the amount of $400. Arlington Co. estimates that 3% of ending A/R at 12/31/2023 will be uncollectible during 2024. What is the ending balance of the account receivable account, the net realizable value of Arlingtons A/R, and Arlingtons 2023 bad debt expense, respectively?
231,600 (ending A/R), $224,652 (NRV of A/R), $6,348 (bad debt expense)
$135,000 (ending A/R), $130,950 (NRV of A/R), $3,450 (bad debt expense)
$131,600 (ending A/R), $127,652 (NRV of A/R), $3,748 (bad debt expense)
$131,600 (ending A/R), $127,652 (NRV of A/R), $3,348 (bad debt expense)
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