Question: Bay Company began using the allowance method in 2014. On January 1, 2014, Bay had a $3,000 balance in the Accounts Receivable account and a

Bay Company began using the allowance method in 2014. On January 1, 2014, Bay had a $3,000 balance in the account and a zero balance in the Allowance for Doubtful Accounts account. During 2014, Bay provided $25,000 of service on account. The company collected $21,000 cash from account receivable. Uncollectible accounts are estimated to be 2% of sales on account.
The net realizable value of Bay's as of December 31, 2014 was
Select one:
A. $7,000
B. $3,500.
C. $6,500.
D. $500

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