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The Miller Company earned $111,000 of revenue on account during Year 2. There was no beginning balance in the accounts receivable and allowance accounts. During Year 2, Miller collected $76,000 of cash from its receivables accounts. The company estimates that it will be unable to collect 3% of its sales on account.What is the net realizable value of Miller's receivables at the end of Year 1?

Respuesta :

Answer:

$31,670

Explanation:

Given that,

Revenue earned on account during Year 2 = $111,000

Cash collected from its receivables accounts during Year 2 = $76,000

Uncollectibles:

= 3% of its sales on account

= 0.03 × $111,000

= $3,330

Net realizable value of Miller's receivables at the end of Year 1:

= Revenue earned on account - Cash collected from its receivables accounts - Uncollectibles

= $111,000 - $76,000 - $3,330

= $31,670

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