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Losh Company has the following unadjusted account balances on December 31, 2019. The pre-adjustment balance of Allowance for Doubtful Accounts is $3,200 debit. This company uses the following aging of accounts receivable to estimate its bad debts.

Accounts Age	Balance	Estimated Uncollectible %
Current (not yet due)	$192,000	1.0%
1-30 past due	$128,000	3.5%
31-60 past due	$ 32,000	12.0%
61-90 past due	$ 13,000	42.0%
Over 90 days past due	$ 6,400	67.0%
Total	$371,400

The Net Realizable Value of Accounts Receivable reported on the year-end Balance Sheet will be:

Select one:

A. $351,412

B. $348,212

C. $391,925

D. $354,612

Answer 1

Answer:

Accounts age	Balance (A)	Estimated Uncollectible % (B)	Allowance for uncollectible (C = A*B)
Current (not yet due)	$        192,000	1	$                                                               1,920
1-30 past due	$        128,000	3.5	$                                                               4,480
31-60 past due	$           32,000	12	$                                                               3,840
61-90 past due	$           13,000	42	$                                                               5,460
Over 90 days past due	$             6,400	67	$                                                               4,288
Total	$        371,400		$                                                             19,988

Gross balance = $371,400
Less: allowance for uncollectible = $19,988

Net realizable value of accounts receivable = 371400-19988 = $351,412

Option A $351,412 is the correct answer.

The other options are incorrect as they are adjusting the opening balance in allowance for doubtful accounts and is not right.