The Accounts Receivable balance is $20,000 and the Allowance for Bad Debts has a credit balance of $4,000 at the end of the year.

What is the net realizable value of Accounts Receivable at the end of the year?

The net realizable value (NRV) of Accounts Receivable is calculated by subtracting the Allowance for Bad Debts from the Accounts Receivable balance.

Given:
- **Accounts Receivable** = $20,000
- **Allowance for Bad Debts** = $4,000

\[
\text{Net Realizable Value (NRV)} = \text{Accounts Receivable} - \text{Allowance for Bad Debts}
\]
\[
\text{NRV} = 20,000 - 4,000 = 16,000
\]

### Answer:
The net realizable value of Accounts Receivable at the end of the year is **$16,000**.

Would you like more details on this calculation or have additional questions?

### Related Questions:
1. What does an allowance for bad debts represent in financial statements?
2. How is the allowance for bad debts estimated at the end of each period?
3. How would the NRV change if the allowance for bad debts were increased?
4. What is the impact on financial statements if the allowance for bad debts is overestimated?
5. How are bad debts recorded when using the direct write-off method?

**Tip:** Net realizable value helps companies show a realistic estimate of the receivables they expect to collect.

The Accounts Receivable balance is $20,000 and the Allowance for Bad Debts has a credit balance of $4,000 at the end of the year. What is the net realizable value of Accounts Receivable at the end of the year?

Learn how to determine the net realizable value (NRV) of Accounts Receivable when given an allowance for bad debts. This solution demonstrates step-by-step calculations to find the NRV when Accounts Receivable is $20,000, and the Allowance for Bad Debts is $4,000, resulting in an NRV of $16,000. Ideal for high school accounting students.

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