Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Liang Company began operations on January 1, 2014. During its first two years, the company completed a number of transactions involving sales on credit, accounts

Liang Company began operations on January 1, 2014. 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.

2014

a.

Sold $1,350,900 of merchandise (that had cost $978,500) on credit, terms n/30.

b.

Wrote off $20,100 of uncollectible accounts receivable.

c.

Received $673,200 cash in payment of accounts receivable.

d.

In adjusting the accounts on December 31, the company estimated that 1.50% of accounts receivable will be uncollectible.

2015

e.

Sold $1,552,500 of merchandise (that had cost $1,264,700) on credit, terms n/30.

f.

Wrote off $25,400 of uncollectible accounts receivable.

g.

Received $1,113,900 cash in payment of accounts receivable.

h.

In adjusting the accounts on December 31, the company estimated that 1.50% of accounts receivable will be uncollectible.

Required:

Prepare journal entries to record Liang's 2014 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 amount.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting with International Financial Reporting Standards

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

4th edition

1119504309, 1-119-50340-8, 9781119503408 , 978-1119504306

More Books

Students also viewed these Accounting questions

Question

1. What is the meaning of the information we are collecting?

Answered: 1 week ago

Question

3. How much information do we need to collect?

Answered: 1 week ago

Question

2. What types of information are we collecting?

Answered: 1 week ago