At the beginning of Year 3 Omega Company had a $52,000 balance in its accounts receivable account and a $1,400 balance in allowance for doubtful accounts. During Year 3 Omega experienced the following events.

1. (1) Omega earned $220,000 of revenue on account.

2. (2) Collected $230,000 cash from accounts receivable.

3. (3) Wrote-off $1,000 of accounts receivable as uncollectible.

 

Omega estimates uncollectible accounts to be 4% of receivables. Based on this information, the amount of NET REALIZABLE VALUE OF RECEIVABLES   shown on the Year 3 balance sheet is

Multiple Choice

A.          $39,360.

B.          $41,000.

C.          $42,640.

D.         $43,000.

 

Answer rating: 100% (QA)

Calculation of net realizable value of receivables Amount in Opening balance of Accounts rec... View the full answer