The Avec Company’s account balances at December 31, year 1, for accounts receivable and the related allowance for uncollectible accounts were $800,000 and $40,000 respectively.

 The Avec Company’s account balances at December 31, year 1, for accounts receivable and the related allowance for uncollectible accounts were $800,000 and $40,000 respectively. An aging of accounts receivable indicated that $71,100 of the December 31 receivables may be uncollectible. The net realizable value of accounts receivable was
$688,900
$728,900 Correct
$760,000
$768,900
 You Answered Correctly!
This answer is correct. Since the total receivables per the books were $800,000 and accounts receivable of $71,100 were estimated to be uncollectible, those expected to be collectible were $728,900 ($800,000 − $71,100). The $40,000 is irrelevant as it represents the unadjusted balance of the allowance for uncollectible accounts.