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    realizable value of accounts receivable

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    A portion of the current assets section of the December 31, 2010, balance sheet for Gibbs Co. is presented here:

    Accounts receivable $ 20,700
    Less: Allowance for bad debts (3,500) $ 17,200

    The company's accounting records revealed the following information for the year ended December 31, 2011:

    Sales (all on account) $ 166,000
    Cash collections from customers 152,000
    Accounts written off 2,500
    Bad debts expense (accrued at 12/31/11) 5,900

    Required:

    Calculate the net realizable value of accounts receivable at December 31, 2011, and allowance for bad debts for Gibbs Co., as of that point in time. (Hint: Use T-accounts to analyze the Accounts Receivable and Allowance for Bad Debts accounts.) (Amounts to be deducted should be indicated with minus sign. Omit the "$" sign in your response.)

    At December 31, 2011:
    Accounts receivable $ __________
    Less: Allowance for bad debts _______ $________

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    https://brainmass.com/business/auditing/realizable-value-of-accounts-receivable-458757

    Solution Summary

    Your tutorial is in Excel, attached. Click in cells to see computations. I have shown you the activity in both accounts and then the "net".

    $2.19

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