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5. Liang Company began operations on January 1, 2016. During its first two years, the company completed a number of transactions involving sales on credit,
5. Liang Company began operations on January 1, 2016. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections and bad debts. These transactions are summarized as follows. a. Sold $1,345,434 of merchandise (that had cost $975,000 ) on credit, terms n/30. b. Wrote off $18,300 of Uncollectible Accounts Receivable. c. Received $669,200 cash in payment of Accounts Receivable. d. In adjusting the accounts on December 31 , the company estimated that 1.5% of Accounts Receivable will be uncollectible. e. Sold $1,525,634 of merchandise on credit (that has a cost of $1,250,000 ), terms n/30. f. Wrote off $27,800 of Uncollectible Accounts Receivable. g. Received $1,204,600 cash in payment of Accounts Receivable. h. In adjusting the accounts on December 31 , the company estimated that 1.5% of Accounts Receivable will be uncollectible. Prepare journal entries to record Liang's 2016 and 2017 summarized transactions and its year-end adjustments to record bad debt expense. (Note: The company uses the perpetual inventory system and it applies the allowance method for its Accounts Receivable. Round amounts to the nearest dollar.)
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