Question: During 2015, its first year of operations, Pave Construction provides services on account of $160,000. By the end of 2015, cash collections on these accounts

During 2015, its first year of operations, Pave Construction provides services on account of $160,000. By the end of 2015, cash collections on these accounts total $110,000. Pave estimates that 25% of the uncollected accounts will be bad debts.

Required:

1. Record the adjustment for uncollectible accounts on December 31, 2015.

2. Calculate the net realizable value of accounts receivable.

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