Question
Williams Company uses the net credit sales method to estimate bad debt expense and has estimated that 6% of its credit sales will be uncollectible.
Williams Company uses the net credit sales method to estimate bad debt expense and has estimated that 6% of its credit sales will be uncollectible. During 2027, Williams Company reported net credit sales of $350,000 and collected a total of $426,000 cash from its credit customers. Also during 2027, Williams Co. wrote-off $12,000 of accounts receivable as being uncollectible and had recoveries of previously written off accounts receivable totaling $19,000 (note that the $19,000 recovery is not included in the $426,000 of cash collections given previously). Williams Company reported accounts receivable of $202,000 and had an allowance for doubtful accounts with a $27,000 credit balance at January 1, 2027.
Calculate the net realizable value of Williams Company's accounts receivable at December 31, 2027.
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