Question

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 a. Sold $1,347,500 of merchandise (that had cost $975,700) on credit, terms n/30 b. Wrote off $18,700 of uncollectible accounts receivable. c. Received $666,200 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.50% of accounts receivable will be uncollectible. 2017 e. Sold $1,589,700 of merchandise (that had cost $1,266,700) on credit, terms n/30. f. Wrote off $28,100 of uncollectible accounts receivable. g. Received $1,202,000 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 2.50% of accounts receivable will be uncollectible. 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 accounts receivable.) (Round your intermediate calculations to the nearest dollar amount.) Complete this question by entering your answers in the tabs below. JE 2016 JE 2017 Prepare journal entries to record Liang's 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 accounts receivable.) View transaction list Journal entry worksheet 2 3 4 5 Sold $1,589,700 of merchandise on credit, terms n/30. Note: Enter debits before credits. General Journal Debit Credit Transaction e(1)

Answer 1

credit Transation Debit General Tournal Accounts Receivable 1,34, S00 al1) 34500 Sales To secosd sales) f975700 COst of goools sald $975,700 Merchanolise Inuentoy (To secord cost o goodAolo) f10,700 Allonsance for doubt ful accounts f18700 Accounts Receivable To Aecoad uncallcctible aciaunts receivable) F.666,200 carhe Ci f666200 Accounts Receivable cash received) To hecosd $35265 debts expese Bad 35265 Aluavance for doubtful acouts To Aecosd bad aett cepense)

Credit Transaction Debit Genesat Toumat Cly Accounts Receivable FLS89,700 sale LTo heiond sales) 1,266,700 ele) Cost o goods sold Merchandisc nuentoy (To Aecesd coat of goadi Aotd) Allousance for doust ful acLounts 28,Loo 28,100 Accounts Receivable To &ecoad allousancefor cloubt ful accounts) FLeod,ooo Cash 1202 000 Accounts R eceivable (To hecond cash heeeiuea) Bad desu Cpense F37,090 Alowancefor aloubtful a ceounts To hecorol bad alebe crpenae) 3न, ०१०

Capeul ation : d014 a Adjutment to the allousanee=Reguised ending allowance Unadyugted Balance firstly, we uiu calculate heauiaed enoling allousante Credit eales- Colectious Wsite os) x dercest Uncollectible Requined Ending Alowance 1 (1347,500-664, 200 - #18,409) X d: S0% f662,600 x So7 16, 565 Now, 16, 565 t 18,700 35,265 Adjustment to the allousance 2017 ihs Adiustment -to the alowance Reguined ending altouwance t Unadjust ca Balance Reguined Ending Arousance (Creait esates Colle ctiens White A)XPercent Uncollectible 1,509,700-1, 20 2,00 0 - $28,/o0)x 2-s 359, 600 x 2.507 $8,990 Now, F990 t 8, Io 0 3, 09 0 Adjustent to the aulousance