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Is Accounts receivable net of allowances another way to say, Net realizable value and/or Accounts receivable, net? Net realizable value = Ending debit balance of
Is Accounts receivable net of allowances another way to say, "Net realizable value and/or Accounts receivable, net"?
Net realizable value = Ending debit balance of Accounts receivable - Allowance for uncollectible receivable accounts
Do you see the two questions above? I have another question on below too. I have typed my interpretation as why the I the net realizable value, also called Accounts Receivable net of Allowances is $5,700. Is my explanation that I have typed above as well as the other question correct? Thank you very much!
Question 14 SolidCo's balance sheet for the most recent year end is below. Current Assets Cash: 3,000 Marketable securities: 600 Accounts receivable: 6,000 Less allowance for bad debt: -300 Inventory: 1.200 Total Current Assets: 10,500 Current Liabilities Accounts payable: 4,000 Current portion of notes payable: 1,300 Other current accrued expenses: 2.000 Total Current Liabilities: 7,300 The quick ratio for this company is closest to: 1.32 1.27 1.26 Solution : Quick ratio = 1.27 is the correct option. Explaination: Quick Ratio = Cash + Marketable Securities + Accounts Receivable net of Allowances / Total Current Liability = $3000 + $600 + 55,700 / S7,300 =$9,300/S7,300 =1.27 Normally, the ending debit-balance-of'for Accounts receivable is subtracted from or by the ending credit balance for/of-Allowance for uncollectible receivable accounts (Allowance for Bad- debts) to get the Net realizable value (Accounts receivable, net). --In this case, the ending debit balance of for Accounts receivable-is-$6,000, and the ending credit balance for/of Allowance-for- uncollectible receivable accounts (Allowance for Bad-debts)-is--$300.--Since Allowance for uncollectible receivable accounts (Allowance for Bad debts) is --$300, -I must find the sum of the ending-debit balance of for Accounts receivable of $6.000-and-Allowance for uncollectible receivable accounts (Allowance-for-Bad debts) of-$300 to get ($6,000+(-$300)=$5,700). -Is- the-explanation that I described above-correct as why the net realizable value, also called Accounts Receivable net of Allowances is $5,70029Step by Step Solution
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