Liang Company began operations in Year 1. 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. Year 1

1. Sold $1,345,400 of merchandise (that had cost $982,200) on credit, terms n/30.
2. Wrote off $18,300 of uncollectible accounts receivable.
3. Received $672,700 cash in payment of accounts receivable.
4. In adjusting the accounts on December 31, the company estimated that 1.30% of accounts receivable would be uncollectible.

Year 2

5. Sold $1,531,400 of merchandise (that had cost $1,269,200) on credit, terms n/30.
6. Wrote off $30,400 of uncollectible accounts receivable.
7. Received $1,308,100 cash in payment of accounts receivable.
8. In adjusting the accounts on December 31, the company estimated that 1.30% of accounts receivable would be uncollectible.

Required: Prepare journal entries to record Liangs Year 1 and Year 2 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar.)

Complete this question by entering your answers in the tabs below.

• JE Year 1
• JE Year 2

Prepare journal entries to record Liangs Year 1 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.)

No	Transaction	General Journal	Debit	Credit
1	a(1)	Accounts receivableselected answer correct	1,345,400selected answer correct	not attempted
		Salesselected answer correct	not attempted	1,345,400selected answer correct
2	a(2)	Cost of good soldselected answer correct	982,200selected answer correct	not attempted
		not attempted	not attempted	982,200selected answer correct
3	b.	Allowance for doubtful accountsselected answer correct	18,300selected answer correct	not attempted
		Accounts receivableselected answer correct	not attempted	18,300selected answer correct
4	c.	Cashselected answer correct	672,700selected answer correct	not attempted
		Accounts receivableselected answer correct	not attempted	672,700selected answer correct
5	d.	Bad debts expenseselected answer correct	22,783selected answer incorrect	not attempted
		Allowance for doubtful accountsselected answer correct	not attempted	22,784selected answer incorrect

• JE Year 1
• JE Year 2