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Cullen Company has $235,000 in credit sales, and $164,200 in its Accounts Receivable at the end of the year. The company uses the allowance method to account for uncollectible accounts. The Allowance for Uncollectible Accounts has a $7,250 pre-adjustment credit balance. If the company estimates 6% of credit sales will be uncollectible, what will be the Net Realizable Value of its Accounts Receivable at the end of the year?

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Answer:

Net Realizablel Value of Account receivable = $142,850

Explanation:

Particulars                                                             Amount

Total Accounts Receivable                                  $164,200

- Pre-adjusted Uncollectable Account balance  $7,250

- Current Year Uncollectable Amount                 $14,100   ($235000*6%)

Net Realizable Value                                            $142,850

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