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Aging Accounts Receivable On September 30. 2019 (the end of its fiscal year), Lufkin Corporation reported accounts receivable of $331,750 and an allowance for doubtful accounts of $16,700. During fiscal 2020, the following transactions occurred: On September 30, 2020, an aging of the accounts receivable balance indicated the following: Required: 1. Prepare the journal entries necessary to record the credit sales, collections on account, write-off of accounts receivable, and bad debts expense for Lufkin for fiscal 2020. 2. What are Lufkin’s September 30, 2020, balances in Accounts Receivable and in its Allowance for Doubtful Accounts, and how will they be disclosed on the September 30, 2020, balance sheet? 3. Next Loci Compute Lufkin’s receivables turnover in days, assuming a 365-day business war. What is your evaluation of its collection policies?

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

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Chapter
Section
Chapter 6, Problem 7P
Textbook Problem

Aging Accounts Receivable On September 30. 2019 (the end of its fiscal year), Lufkin Corporation reported accounts receivable of $331,750 and an allowance for doubtful accounts of $16,700. During fiscal 2020, the following transactions occurred:

Chapter 6, Problem 7P, Aging Accounts Receivable On September 30. 2019 (the end of its fiscal year), Lufkin Corporation , example  1

On September 30, 2020, an aging of the accounts receivable balance indicated the following:

Chapter 6, Problem 7P, Aging Accounts Receivable On September 30. 2019 (the end of its fiscal year), Lufkin Corporation , example  2

Required:

  1. 1. Prepare the journal entries necessary to record the credit sales, collections on account, write-off of accounts receivable, and bad debts expense for Lufkin for fiscal 2020.
  2. 2. What are Lufkin’s September 30, 2020, balances in Accounts Receivable and in its Allowance for Doubtful Accounts, and how will they be disclosed on the September 30, 2020, balance sheet?
  3. 3. Next Loci Compute Lufkin’s receivables turnover in days, assuming a 365-day business war. What is your evaluation of its collection policies?

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Chapter 6 Solutions

Intermediate Accounting: Reporting And Analysis
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