"Liang Company began operations on January 1, 2012. 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: 2012 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. 2013 e. Sold $1,525,634 of merchandise (that had cost $1,250,000) on credit, 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. Required Prepare journal entries to record Liangs 2012 and 2013 summarized transactions and its year-end adjust- ments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable. Round amounts to the nearest dollar.)" (Financial and Managerial Accounting, p. 327)

Financial and Managerial Accounting [VitalSource Bookshelf version]. Retrieved from https://bookshelf.vitalsource.com/books/9781308524320

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