Solution: The M Company earned $95,000 of revenue on account during the year. There was no beginning balance in the accounts receivable and allowance accounts. During the year, M collected $68,000 of cash from

Problem

The M Company earned $95,000 of revenue on account during the year. There was no beginning balance in the accounts receivable and allowance accounts. During the year, M collected $68,000 of cash from customers on account. The company estimates that it will be unable to collect 3% of its sales on account. The net realizable value of accounts receivable at the end of the year was

a. $24,150.

b. $24,960.

c. $29,850.

d.  $27,000.