Question

Lankton Company has the following account balances at year-end: Accounts receivable $90,000 Allowance for doubtful accounts $4,800 Sales discounts $3,200. Lankton should report accounts receivable at a net amount of_________

Answer 1

Lankton Company should report their net accounts receivable as $85,200, which is calculated by subtracting the allowance for doubtful accounts ($4,800) from the gross accounts receivable ($90,000).

Step-by-step explanation:

The question asks to calculate the net amount of accounts receivable for Lankton Company. To determine this, we need to adjust the gross accounts receivable by subtracting the allowance for doubtful accounts. Lankton's gross accounts receivable is $90,000, and the allowance for doubtful accounts is $4,800. No adjustment is needed for sales discounts as these have already been accounted for and do not affect the net accounts receivable.

To calculate:

• Gross Accounts Receivable: $90,000
• Less: Allowance for Doubtful Accounts: $4,800

Therefore, the net accounts receivable is calculated as follows:

$90,000 - $4,800 = $85,200

Lankton Company should report a net accounts receivable of $85,200.