9 Liang Compeny begen operations on Jenuary 1.2016. During its frst two years, t

Question

9 Liang Compeny begen operations on Jenuary 1.2016. During its frst two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bed debts. These transections are summarized as follows 2016 a. Sold $1345,434 of merchandise (that had cost $975,000) on credit, terms n/30. 6 points b. Wrote off $18,300 of uncollectible accounts receivable d. In adjusting the counts on December 31, the company estimated that 1.5% of accounts receivable will be uncollectible. of accounts receivable 2017 Print e. Sold $1,525,634 of merchandise on credit that had cost $1,250,000, terms n/30 f. Wrote off $27,800 of uncollectible accounts receivable. g. Received $1,204,600 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that t5% of accounts receivable will be uncollecte. References 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 eccounts receivable) (Round your intermediate calculetions to the nearest dollar amount.)

Explanation / Answer

2016 a 1 Accounts receivable 1345434                  Sales revenue 1345434 a 2 Cost of goods sold 975000                  Merchandise inventory 975000 b Allowance for uncollectible accounts 18300                Accounts receivable 18300 c Cash 669200            Accounts receivable 669200 d Bad debt expense 28169             Allowance for uncollectible accounts 28169 Accounts receivable at end 657934 (1345434-669200-18300) Percentage ucollected 1.50% Uncollectible accounts at end 9869 Add Accounts written off 18300 Bad debt expense 28169 2017 a 1 Accounts receivable 1525634                  Sales revenue 1525634 a 2 Cost of goods sold 1250000                  Merchandise inventory 1250000 b Allowance for uncollectible accounts 27800                Accounts receivable 27800 c Cash 1204600            Accounts receivable 1204600 d Bad debt expense 22330             Allowance for uncollectible accounts 22330 Accounts receivable at end 293234 (657934+1525634-27800-1204600) Percentage ucollected 1.50% Uncollectible accounts at end 4399 Add Accounts written off 27800 Less beginning uncollectible accounts 9869 Bad debt expense 22330 (4399+27800-9869)

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