Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Prepare journal entries to record the preceding transactions and events. (The company uses the perpetual inventory system. Round amounts to the nearest dollar.) Liang Company

Prepare journal entries to record the preceding transactions and events. (The company uses the perpetual inventory system. Round amounts to the nearest dollar.)

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:

  1. Sold $1,345,434 of merchandise (that had cost $975,000) on credit, terms n/30.
  2. Wrote off $18,300 of uncollectible accounts receivable.
  3. Received $669,200 cash in payment of accounts receivable.
  4. In adjusting the accounts on December 31, the company estimated that 1.5% of accounts receivable will be uncollectible.
  5. Sold $ 1,525,634 of merchandise (that had cost $1,250,000) on credit, terms n/30.
  6. Wrote off $27,800 of uncollectible accounts receivable
  7. Received $1,204,600 cash in payment of accounts receivable.
  8. 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 adjustments 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.)

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

Contemporary Issues In Social Science

Authors: Simon Grima, Ercan Özen, Hakan Boz

1st Edition

1800439318, 9781800439313

More Books

Students also viewed these Accounting questions

Question

Is Ernie being used to emotionalize Keebler cookies?

Answered: 1 week ago

Question

How can you develop media literacy?

Answered: 1 week ago