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9 March, 07:28

During the year, Kiner Company made an entry to write off a $16,000 uncollectible account. Before this entry was made, the balance in accounts receivable was $200,000 and the balance in the allowance account was $18,000. The net realizable value of accounts receivable after the write-off entry was: a) $ 200.000 b) $198.000 c) $ 166.000 d) $182.000

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  1. 9 March, 08:14
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    The correct option is B,$198,000

    Explanation:

    The balance in allowance for uncollectible accounts was standing at $18,000 and it was decided to write-off $16,000 off the this existing balance, which implies that the balance left in the allowance for uncollectible account to set off against accounts receivable is $2,000 ($18,000-$16,000).

    Invariably, the net realizable value of accounts receivable is $198,000 ($200,000 - $2,000).

    The correct option hence is B, $198,000
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