Refer to the data in PE 6-10. Taking into account the allowance for bad debts established at the end of the year, compute the net realizable value of accounts receivable (1) before the write-off of uncollectible accounts and (2) after the write-off of uncollectible accounts.
PE 6-10
The company had credit sales of $2,500,000 during the year, its first year of business. The company has estimated that $50,000 of these sales on account will ultimately be uncollectible. In addition, a year-end review of accounts identified that of the $200,000 in accounts outstanding as of the end of the year, $43,000 were worthless because the business customers associated with those accounts had gone bankrupt.