Question 15 Not yet answered Marked out of 1.00 Flag question Question text Losh Company has the following unadjusted account...

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Losh Company has the following unadjusted account balances onDecember 31, 2019. The pre-adjustment balance of Allowance forDoubtful Accounts is $3,200 debit. This company uses the followingaging of accounts receivable to estimate its bad debts.
Accounts Age
Balance
Estimated Uncollectible %
Current (not yet due)
$192,000
1.0%
1-30 past due
$128,000
3.5%
31-60 past due
$ 32,000
12.0%
61-90 past due
$ 13,000
42.0%
Over 90 days past due
$ 6,400
67.0%
Total
$371,400

The Net Realizable Value of Accounts Receivable reported on theyear-end Balance Sheet will be:
Select one:
A. $351,412
B. $348,212
C. $391,925
D. $354,612

Answer & Explanation Solved by verified expert

4.5 Ratings (782 Votes)

Answer:

Accounts age	Balance (A)	Estimated Uncollectible % (B)	*Allowance for uncollectible (C = AB)**
Current (not yet due)	$ 192,000	1	$ 1,920
1-30 past due	$ 128,000	3.5	$ 4,480
31-60 past due	$ 32,000	12	$ 3,840
61-90 past due	$ 13,000	42	$ 5,460
Over 90 days past due	$ 6,400	67	$ 4,288

Total	$ 371,400		$ 19,988

Gross balance = $371,400
Less: allowance for uncollectible = $19,988

Net realizable value of accounts receivable = 371400-19988 = $351,412

Option A $351,412 is the correct answer.

The other options are incorrect as they are adjusting the opening balance in allowance for doubtful accounts and is not right.

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Accounts Age	Balance	Estimated Uncollectible %
Current (not yet due)	$192,000	1.0%
1-30 past due	$128,000	3.5%
31-60 past due	$ 32,000	12.0%
61-90 past due	$ 13,000	42.0%
Over 90 days past due	$ 6,400	67.0%
Total	$371,400