Problem 7-4A (Algo) Accounts receivable transactions Liang Company began operations in Year 1. 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. Year 1 a. Sold $1,346,700 of merchandise on credit (that had cost $984,000), terms n/30 b. Wrote off $21,200 of uncollectible accounts receivable. c. Received $674,300 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.70% of accounts receivable would be uncollectible. Year 2 e. Sold $1,559,200 of merchandise (that had cost $1,263,700) on credit, terms n/30 Wrote off $33,100 of uncollectible accounts receivable. g. Received $1,317,800 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 2.70% of accounts receivable would be uncollectible. Required: Prepare journal entries to record Liang's Year 1 and Year 2 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) Note: Round your intermediate calculations to the nearest dollar. Answer is complete but not entirely correct. JE Year 1 JE Year 2 Prepare journal entries to record Liang's Year 2 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.) No Transaction General Journal 1 (1) Accounts receivable Sales Debit 1,559,200 Credit 1,559,200 2 e(2) Cost of goods sold 1,283,700 Merchandise inventory 1,263,700 3 f Allowance for doubtful accounts 33,100 Accounts receivable 33,100 4 O Cash Accounts receivable 5 h. Bad debts expense Allowance for doubtful accounts