Skip to main content

Ch 07 HW (15 pts)

AnswerSaved

Help opens in a new windowSave & ExitSubmit

Item6

5points

ItemSkipped

eBook

Print

References

Check my workCheck My Work button is now enabled

Item 6

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

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.

2017

5. Sold $1,525,634 of merchandise on credit (that had cost $1,250,000), 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.