Problem 7-4A Accounts receivable transactions and bad debts adjustments LO C1, P2, P3 Liang Company began operations on January 1, 2016. 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. 2016 a. Sold $1,354,700 of merchandise (that had cost $978,000) on credit, terms n/30. b. Wrote off $21,400 of uncollectible accounts receivable. c. Received $669,000 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.50% of accounts receivable will be uncollectible. 2017 e. Sold $1,559,000 of merchandise (that had cost $1,294,100) on credit, terms n/30. f. Wrote off $32,400 of uncollectible accounts receivable. g. Received $1,162,900 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 2.50% of accounts receivable will be uncollectible. Required: Prepare journal entries to record Liang's 2016 and 2017 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.) JE 2016 JE 2017 Prepare journal entries to record Liang's 2016 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.) General Journal No Transaction Debit Credit 1 a(1) Accounts receivable 1,354,700 Sales 1,354,700 Cost of good sold 2 a(2) 978,000 Merchandise inventory 978,000 Allowance for doubtful accounts 3 b. 21,400 Accounts receivable 21,400 4 Cash 669,000 C. Accounts receivable 669,000 Bad debts expense d. 32,400 5 Allowance for doubtful accounts 49,008 et