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 $1,352,400 of merchandise on credit (that had cost $978,500), terms n/30. b. Wrote off $21,200 of uncollectible accounts receivable. c. Received $671,800 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 1.40% of accounts receivable would be uncollectible. Year 2 e. Sold $1,570,300 of merchandise (that had cost $1,293,8O00) on credit, terms n/30. f. Wrote off $32,800 of uncollectible accounts receivable. g. Received $1,273,000 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 1.40% 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.) (Round your intermediate calculations to the nearest dollar.)
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 $1,352,400 of merchandise on credit (that had cost $978,500), terms n/30. b. Wrote off $21,200 of uncollectible accounts receivable. c. Received $671,800 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 1.40% of accounts receivable would be uncollectible. Year 2 e. Sold $1,570,300 of merchandise (that had cost $1,293,8O00) on credit, terms n/30. f. Wrote off $32,800 of uncollectible accounts receivable. g. Received $1,273,000 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 1.40% 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.) (Round your intermediate calculations to the nearest dollar.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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
Debit
Credit
e(1)
Accounts receivable
1,570,300
1
1,570,300
Sales
1,293,800
e(2)
Cost of goods sold
1,293,800
Merchandise inventory
32,800
3
f.
Allowance for doubtful accounts
32,800
Accounts receivable
1,273,000
4
9.
Cash
1,273,000
Accounts receivable
15,762 8
5.
h.
Bad debts expense
15,763
Allowance for doubtful accounts
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Transcribed Image Text: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
Debit
Credit
e(1)
Accounts receivable
1,570,300
1
1,570,300
Sales
1,293,800
e(2)
Cost of goods sold
1,293,800
Merchandise inventory
32,800
3
f.
Allowance for doubtful accounts
32,800
Accounts receivable
1,273,000
4
9.
Cash
1,273,000
Accounts receivable
15,762 8
5.
h.
Bad debts expense
15,763
Allowance for doubtful accounts
Prev
1 of 1
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...
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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
a. Sold $1,352,400 of merchandise on credit (that had cost $978,500), terms n/30.
b. Wrote off $21,200 of uncollectible accounts receivable.
c. Received $671,800 cash in payment of accounts receivable.
d. In adjusting the accounts on December 31, the company estimated that 1,40% of accounts recelvable would be uncollectible.
Year 2
e. Sold $1,570,300 of merchandise (that had cost $1,293,8O00) on credit, terms n/30.
f. Wrote off $32,800 of uncollectible accounts receivable.
g. Received $1,273,000 cash in payment of accounts receivable.
h. In adjusting the accounts on December 31, the company estimated that 1.40% 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.) (Round
your intermediate calculations to the nearest dollar.)
< Prev
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Transcribed Image Text:omat ior
CisCo webeX Mee.
niips://www.disco. UH Core Curriculu.
2018-2019-Catalo.
TCCN---Bu
Saved
Help
Check my work mode : This shows what is correct or Incorrect for the work you have completed so far. It does not indicate comp
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
a. Sold $1,352,400 of merchandise on credit (that had cost $978,500), terms n/30.
b. Wrote off $21,200 of uncollectible accounts receivable.
c. Received $671,800 cash in payment of accounts receivable.
d. In adjusting the accounts on December 31, the company estimated that 1,40% of accounts recelvable would be uncollectible.
Year 2
e. Sold $1,570,300 of merchandise (that had cost $1,293,8O00) on credit, terms n/30.
f. Wrote off $32,800 of uncollectible accounts receivable.
g. Received $1,273,000 cash in payment of accounts receivable.
h. In adjusting the accounts on December 31, the company estimated that 1.40% 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.) (Round
your intermediate calculations to the nearest dollar.)
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