If the borrower just used the reverse mortgage proceeds to pay off the original mortgage, after ten years the reverse mortgage balance, including fees and interests, would be around $135,000. If on the other hand, you want to establish a line of credit or receive monthly income from the reverse mortgage, then you will want to have as much equity available as possible. For example, take the 65-year-old with the $300,000 home.
The average accounts receivable collection period can be calculated from the following equation: Period=DaysReceivablesTurnover{\displaystyle Period={\frac {Days}{ReceivablesTurnover}}}. In the equation, days refers to the number of days in the period being measures (usually a year or half of a year).
Answer Accounts receivable at year end are $ 30,000 ($ 400,000 sales on account 2 $ 370,000 collection of receivables). The amount in the allowance for doubtful accounts would be $ 4,000 ($ 400,000 credit sales 3 0.01). The net realizable value of accounts receivable is therefore $ 26,000 ($ 30,000 2 $ 4,000).