As of December 31, 2012, SPK Inc reported the following information on its balance sheet:

Accounts receivable 900,000

Provision for doubtful accounts 54,000 (credit)

During 2013, the company had the following transactions related to accounts receivable:

Sales on Account 3,000,000

Collections on Account 2,850,000

Write-offs for uncollectible accounts 60,000

Recovery of accounts previously penalized 12,000

Required

A) Assuming that bad debts are estimated at 5% of accounts receivable at the end of the year, determine the net realizable value (after adjustments) of accounts receivable.

B) If the insolvency is estimated at 1.5% of credit sales, determine the final balance in the Provision for doubtful accounts after adjustment.