Problem: On January 1, 2009, the balance in Great Lakes Co.'s Allowance for Bad Debts account was $5,200. During the year, a total of $3,500 of delinquent accounts receivable were written off as bad debts. The balance in the Allowance for Bad Debts account at December 31, 2009, was $7,300.
(a.) What was the total amount of bad debts expense recognized during the year?
(b.) Explain the term "net realizable value" as it relates the presentation of Accounts Receivable on the Balance Sheet.