Gowns, Inc. uses the percentage of sales basis to estimate its bad debts. For the year

ended December 31, 2017, Gowns' total credit sales are 2,500,000. Management of the

company estimates that 1% of credit sales will become uncollectible. The existing balance

in the Allowances for Doubtful Accounts is a credit balance of 3,000. The Accounts

Receivable balance at December 31, 2017 is 220,000. The cash realizable value of

Accounts Receivable reported on the statement of financial position at December 31,

2017 is

a. 195,000.

b. 198,000.

c. 192,000.

d. 242,000.