Prime Corp. has an ending balance in the accounts receivable account of $100,000. Prime recorded bad debt expense of $3,000. Prime has an ending balance in the allowance for uncollectible accounts of $7,000. What is the net accounts receivable balance

The answer is $93,000

Explanation: From the question above, we have:

Ending balance in the accounts receivable account = $100,000

Prime recorded bad debt expense = $3,000

Allowance for uncollectible accounts = $7,000

The net realizable value of accounts receivable is calculated as:

accounts receivable balance - allowance for uncollectible accounts

Therefore we have:

$100,000 - $7,000 = $93,000

The bad debt expenses have been debited already, therefore, they are no longer part of the allowance for uncollectible accounts.

$93,000

Explanation:

Bad debt is a customers account that is written off as it can not be collected due to reasons like insolvency or other financial crisis suffered by the customer , while the allowance for uncollectible accounts is just allowing possibility of future non payments. estimates are made and recorded in the current year.

Receivable balance = $100,000

Bad debt Expense = $100,000

Allowance for Uncollectible accounts = $7000

Net account receivable balance = $(100,000-7000) =$93,000

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