problem 7-4A(algo)

Problem 7-4A (Algo) Accounts receivable transactions and bad debts adjustments LO C1, P2, P3

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

1. Sold $1,353,000 of merchandise on credit (that had cost $982,900), terms n/30.
2. Wrote off $18,500 of uncollectible accounts receivable.
3. Received $666,100 cash in payment of accounts receivable.
4. In adjusting the accounts on December 31, the company estimated that 2.40% of accounts receivable would be uncollectible.

Year 2

1. Sold $1,560,700 of merchandise (that had cost $1,331,600) on credit, terms n/30.
2. Wrote off $30,200 of uncollectible accounts receivable.
3. Received $1,311,900 cash in payment of accounts receivable.
4. In adjusting the accounts on December 31, the company estimated that 2.40% 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.

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Prepare journal entries to record Liang's Year 1 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.) Journal entry worksheet 5 Sold $1,353,000 of merchandise on credit, terms n/30. Note: Enter ifehits before credits. Prepare journal entries to record Liang's Year 2 summarized transactions and its year-end adjustments to record bad debts exp. (The company uses the perpetual inventory system, and it applies the allowance method for its accounts receivable.) Journal entry worksheet 45 Sold $1,560,700 of merchandise on credit, terms n/30. Note: Enter debits before credits