Liang Company began operations on January 1, 2017. During itsfirst two years, the company completed a number of transactionsinvolving sales on credit, accounts receivable collections, and baddebts. These transactions are summarized as follows.
2017
Sold $1,348,400 of merchandise (that had cost $984,500) oncredit, terms n/30.
Wrote off $18,400 of uncollectible accounts receivable.
Received $670,200 cash in payment of accountsreceivable.
In adjusting the accounts on December 31, the companyestimated that 1.30% of accounts receivable will beuncollectible.
2018
Sold $1,516,800 of merchandise on credit (that had cost$1,347,100), terms n/30.
Wrote off $32,000 of uncollectible accounts receivable.
Received $1,302,100 cash in payment of accountsreceivable.
In adjusting the accounts on December 31, the companyestimated that 1.30% of accounts receivable will beuncollectible.
Required:
Prepare journal entries to record Liang’s 2017 and 2018summarized transactions and its year-end adjustments to record baddebts expense. (The company uses the perpetual inventory system andit applies the allowance method for its accounts receivable.)(Round your intermediate calculations to the nearest dollaramount.)
