Ming Company began operations on January 1, 2008. 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. 2008 a. Sold $1,347,700 of merchandise (that had cost $982,500) on credit, terms n/30. b. Wrote off $20,676 of uncollectible accounts receivable. c. Received $671,100 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 1.3% of accounts receivable will be uncollectible. 2009 e. Sold $1,517,800 of merchandise (that had cost $1,302,200) on credit, terms n/30. f. Wrote off $32,624 of uncollectible accounts receivable. g. Received $1,118,100 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 1.3% of accounts receivable will be uncollectible. Required Prepare journal entries to record Mings 2008 and 2009 summarized transactions and its year-end ad- justments to record bad debts expense. (The company uses the perpetual inventory system. Round amounts to the nearest dollar.) Problem 9-2A Accounts receivable transactions and bad debts adjustments C1 P1 P2 C1- Describe accounts receivable and how they occur and are recorded. Accounts receivable are amounts due from cus- tomers for credit sales. A subsidiary ledger lists amounts owed by each customer. Credit sales arise from at least two sources: (1)sales on credit and (2) credit card sales. Sales on credit refers to a companys granting credit directly to customers. Credit card sales involve customersuse of third-party credit cards. P1 - Apply the direct write-off and allowance methods to ac- count for accounts receivable. The direct write-off method charges Bad Debts Expense when accounts are written off as un- collectible. This method is acceptable only when the amount of bad debts expense is immaterial. Under the allowance method, bad debts expense is recorded with an adjustment at the end of each accounting period that debits the Bad Debts Expense account and credits the Allowance for Doubtful Accounts. The uncollectible accounts are later written off with a debit to the Allowance for Doubtful Accounts. P2 - Estimate uncollectibles using methods based on sales and accounts receivable. Uncollectibles are estimated by focus- ing on either (1) the income statement relation between bad debts expense and credit sales or (2) the balance sheet relation between accounts receivable and the allowance for doubtful accounts. The first approach emphasizes the matching principle using the income statement. The second approach emphasizes realizable value of accounts receivable using the balance sheet