Define net realizable value. How is net realizable value affected when a receivable is written off under the allowance method?
What will be an ideal response?
Net realizable value is the net value a company expects to collect from its accounts receivable. Accounts Receivable less Allowance for Bad Debts equals net realizable value. The entry to write off a receivable reduces the amounts of the Allowance for Bad Debts and Accounts Receivable accounts, but does not affect the net realizable value shown on the balance sheet. This is because both accounts are reduced by the amount of the write-off.
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Immediately prior to the admission of Abbott, the Smith-Jones Partnership assets had been adjusted to current market prices, and the capital balances of Smith and Jones were $40,000 and $60,000 respectively. If the parties agree that the business is worth $120,000, what is the amount of bonus that should be recognized in the accounts at the admission of Abbott?
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Hesson Properties, Inc Transactions for Hesson Properties are provided below. Nov. 1 Hesson purchases two new maintenance carts on credit at $375 each. The carts are added to Hesson's property, plant, and equipment records. Payment is due in 30 days. Nov. 8 Hesson accepts $75 of advance payments from customers for services to be provided in December. Nov. 15 Hesson receives the utility bill for
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Discuss the advantages and disadvantages of partitioning
What will be an ideal response?