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Year 1 a. Sold $1,350,000 of merchandise on credit (that had cost $982,900), terms n/30. b. Wrote off $19,400 of uncollectible accounts receivable. c. Received $666,300 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.20% of accounts receivable would be uncollectible. Year 2 e. Sold $1,515,900 of merchandise (that had cost $1,327,300) on credit, terms n/30. f. Wrote off $28,400 of uncollectible accounts receivable. g. Received $1,175,200 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 2.20% 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.) Note: Round your intermediate calculations to the nearest dollar.

Year 1 a. Sold $1,350,000 of merchandise on credit (that had cost $982,900), terms n/30. b. Wrote off $19,400 of uncollectible accounts receivable. c. Received $666,300 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.20% of accounts receivable would be uncollectible. Year 2 e. Sold $1,515,900 of merchandise (that had cost $1,327,300) on credit, terms n/30. f. Wrote off $28,400 of uncollectible accounts receivable. g. Received $1,175,200 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 2.20% 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.) Note: Round your intermediate calculations to the nearest dollar.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 9-4A (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 $1,350,000 of merchandise on credit (that had cost $982,900), terms n/30. b. Wrote off $19,400 of uncollectible accounts receivable. c. Received $666,300 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.20% of accounts receivable would be uncollectible. Year 2 e. Sold $1,515,900 of merchandise (that had cost $1,327,300) on credit, terms n/30. f. Wrote off $28,400 of uncollectible accounts receivable. g. Received $1,175,200 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 2.20% 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.) Note: Round your intermediate calculations to the nearest dollar. Complete this question by entering your answers in the tabs below. Journal Entry Journal Entry Year 1 Year 2 Prepare journal entries to record Liang's Year 1 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.) View transaction list Journal entry worksheet 1 2 3 4 5 Sold $1,350,000 of merchandise on credit, terms n/30. Note: Enter debits before credits. Transaction a(1) General Journal Debit Credit Record entry Clear entry View general journal > Journal Entry Year 1 Journal Entry Year 2 >
Transcribed Image Text:Problem 9-4A (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 $1,350,000 of merchandise on credit (that had cost $982,900), terms n/30. b. Wrote off $19,400 of uncollectible accounts receivable. c. Received $666,300 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.20% of accounts receivable would be uncollectible. Year 2 e. Sold $1,515,900 of merchandise (that had cost $1,327,300) on credit, terms n/30. f. Wrote off $28,400 of uncollectible accounts receivable. g. Received $1,175,200 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 2.20% 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.) Note: Round your intermediate calculations to the nearest dollar. Complete this question by entering your answers in the tabs below. Journal Entry Journal Entry Year 1 Year 2 Prepare journal entries to record Liang's Year 1 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.) View transaction list Journal entry worksheet 1 2 3 4 5 Sold $1,350,000 of merchandise on credit, terms n/30. Note: Enter debits before credits. Transaction a(1) General Journal Debit Credit Record entry Clear entry View general journal > Journal Entry Year 1 Journal Entry Year 2 >
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