At the end of 2010, Delong Co. has accounts receivable of $701,411 and an allowance for doubtful accounts of $57,023. On January 24, 2011, the company learns that its receivable from Ristau Inc. is not collectible, and management authorizes a write-off of $6,190. What is the cash realizable value of the accounts receivable (1) before the write-off and (2) after the write-off?
Welcome and thanks for your question!Realizable value is the same before and after the write-off because both the allowance and a/r are reduced in the write-offRealizable value is calculated as accounts receivable minus allowance.1) 701,411-57,023=644,3882) 695,221-50,833=644,388
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