The net realizable value of accounts receivable is equal to

Asked by admin @ 05/11/2021 in Business viewed by 261 People

In reviewing the accounts receivable, the cash realizable value is $14,000 before the write-off of a $1,800 account. what is the cash realizable value after the write-off?

Answered by admin @ 05/11/2021

The net
realizable value is equal to the accounts receivable less the costs. By
definition, a write-off is any legitimate deduction or reduction on the value
of an asset. Hence, write-off is considered as a cost. Therefore, the
realizable value (RV) is:

RV = $14,000 – $1,800

RV = $12,200

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The net realizable value of accounts receivable is equal to

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