Question

Pepsi had accounts receivable of $200,000 and an allowance for uncollectible accounts of $8,500 just before writing off as worthless an accounts receivable from Pizza hut of $1,200. Compute the net realizable values of the accounts receivable that is reported on the balance sheet before the write-off and after the write-off.

Answer 1

Answer---------

	Before write off	After accounts written off
Cash (net) realizable value	$ 191,500.00	$   191,500.00

Working

	Before write off	After accounts written off
Accounts receivable	$ 200,000.00	$   198,800.00*
Less: Allowance for doubtful accounts	$      8,500.00	$       7,300.00**
Cash (net) realizable value	$ 191,500.00	$   191,500.00

*200000-1200

**8500-1200