On September 30 2016 the end of its fiscal year #2468

On September 30, 2016 (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 2017,
the following transactions occurred:Credit sales (terms, n/EOM) ............ $2,017,800Collections
on accounts receivable ........ 1,956,000Accounts receivable written off .......... 16,200On
September 30, 2017, 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 2017.2. What are Lufkin’s September 30, 2017, balances in Accounts Receivable and in
its Allowance for Doubtful Accounts, and how will they be disclosed on the September 30, 2017,
balance sheet?3. Compute Lufkin’s receivables turnover in days, assuming a 365-day business
year. What is your evaluation of its collection policies?View Solution:
On September 30 2016 the end of its fiscal year

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