Liang Company began operations in Year 1. During it's first two years, the company completed a number of transactions involveing sales on credit, accounts receivable collections and bad debts. These transactions are summarized as follows.
Hi I'm copying this question from my school text, the version of which you don't have on your site. I can't seem to get to the given answer....
Liang Company began operations in Year 1. During it's first two years, the company completed a number of transactions involveing sales on credit,
Year 1
a. Sold $1,345,434 of merchandise (that had costs $975,000) on credit, terms n/30.
b. Wrote off $18,300 of uncollectivle accounts receivable
c. Received $669,200 cash in payments of acccounts receivable.
d. In adjusting the accounts on Decmeber 31, the company estimated that 1.5% of accounts receivable would be uncollectible.
We are to prepare the
The book has a "Check" (an answer) for d. Dr. Bad Debt Expense $28,169. I can't seem to get to that answer. I figured:
1,345,434 - 18,300 - 669,200 = 657,934 A/R left, of which 1.5% = 9,869.01 bad debts. But this isn't their answer.
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