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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

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 $1,352,100 of merchandise on credit (that had cost $983,300), terms n/30.
  2. Wrote off $18,000 of uncollectible accounts receivable.
  3. Received $665,100 cash in payment of accounts receivable.
  4. In adjusting the accounts on December 31, the company estimated that 1.60% of accounts receivable would be uncollectible.

Year 2

  1. Sold $1,512,400 of merchandise (that had cost $1,334,800) on credit, terms n/30.
  2. Wrote off $34,600 of uncollectible accounts receivable.
  3. Received $1,327,800 cash in payment of accounts receivable.
  4. In adjusting the accounts on December 31, the company estimated that 1.60% of accounts receivable would be uncollectible.

Required:

Prepare journal entries to record Liang's 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.)

Note: Round your intermediate calculations to the nearest dollar.

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Journal entry worksheet Received $665,100 cash in payment of accounts receivable. Note: Enter debits before credits. Journal entry worksheet

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