Question: Data for the year ended December 31 are presented below: Sales (credit) $2,500,000 Sales returns and allowances 50,000 Accounts Receivable (December 31) 640,000 Allowance for

Data for the year ended December 31 are presented below:

Sales (credit) $2,500,000
Sales returns and allowances 50,000
Accounts Receivable (December 31) 640,000
Allowance for Doubtful Accounts
(Before adjustment at December 31) 20,000
Estimated amount of uncollected accounts based on aging analysis 45,000

If the company uses the aging of accounts receivable approach to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense?

a. $640,000

b. $595,000

c. $575,000

d. $620,000

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