A company has gross accounts receivable of $200,000 and an allowance for doubtful accounts of $15,000. It writes off a specific account of $3,000 as uncollectible. What is the net realizable value of accounts receivable after the write-off?

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TheoryPractice · Accepted Answer

$185,000. After the write-off, gross receivables decrease by $3,000 to $197,000 and the allowance also decreases by $3,000 to $12,000. Net realizable value = $197,000 – $12,000 = $185,000. A write-off does not change NRV; it was $185,000 before ($200,000 – $15,000) and remains $185,000 after.

A company has gross accounts receivable of $200,000 and an allowance for doubtful accounts of $15,000. It writes off a specific account of $3,000 as uncollectible. What is the net realizable value of accounts receivable after the write-off?

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