Question:

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 $$1,349,400$ of merchandise $($that had cost $$975,100)$ on credit, terms n$/30.$

b$.$ Wrote off $$20,800$ of uncollectible accounts receivable.

c$.$ Received $$669,100$ cash in payment of accounts receivable.

d$.$ In adjusting the accounts on December $31,$ the company estimated that $1\mathrm{.}70\%$ of accounts

receivable will be uncollectible.

$2017$:

e$.$ Sold $$1,585,600$ of merchandise $($that had cost $$1,322,700)$ on credit, terms $\frac{n}{30}.$

f$.$ Wrote off $$30,400$ of uncollectible accounts receivable.

g$.$ Received $$1130\mathrm{.}000$ cash in payment of accounts receivable.

h$.$ In adjusting the accounts on December $31,$ the company estimated that $170\%$ 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 expenses. $($The company uses the perpetual

inventory system and it applies the allowance method for its accounts receivable$).$