Liang Company began operations on January 1, 2015. During its first two years, the company completed...

Liang Company began operations on January 1, 2015. 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.

2015

Sold $1,350,300 of merchandise (that had cost $975,800) on credit, terms n/30.

Wrote off $19,300 of uncollectible accounts receivable.

Received $671,600 cash in payment of accounts receivable.

In adjusting the accounts on December 31, the company estimated that 1.10% of accounts receivable will be uncollectible.

2016

Sold $1,513,800 of merchandise (that had cost $1,303,100) on credit, terms n/30.

Wrote off $32,600 of uncollectible accounts receivable.

Received $1,114,000 cash in payment of accounts receivable.

In adjusting the accounts on December 31, the company estimated that 1.10% of accounts receivable will be uncollectible.

Required:

Prepare journal entries to record Liang’s 2015 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.)

Prepare journal entries to record Liang’s 2016 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.)

Solutions

Expert Solution

	Beginning accounts receivable	0
	Net credit sales	1350300
		1350300
	Cash received	-671600
	Accounts written off	-19300
	Ending accounts receivable	659400

	Ending accounts receivable	659400
	Percentage uncollected	1.10%
	Ending allowance for doubtful accounts	7253
2015
1	Allowance for dobtful accounts	19300
	Accounts receivable		19300

2	Bad debt expense	26553	(7253+19300)
	Allowance for doubtful accounts		26553
2016
	Beginning accounts receivable	659400
	Net credit sales	1513800
		2173200
	Cash received	-1114000
	Accounts written off	-32600
	Ending accounts receivable	1026600

	Ending accounts receivable	1026600
	Percentage uncollected	1.10%
	Ending allowance for doubtful accounts	11293

4	Ending allowance for doubtful accounts	11293
Add	Accounts receivable written off	32600
		43893
Less	Beginning allowance for douvtful accounts	7253
	Bad debt expense	36639

2016
1	Allowance for dobtful accounts	32600
	Accounts receivable		32600

2	Bad debt expense	36639
	Allowance for doubtful accounts		36639

ekkarill92 answered 9 months ago

Next > < Previous

Related Solutions

Liang Company began operations on January 1, 2016. During its first two years, the company completed...

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 Sold $1,353,200 of merchandise (that had cost $984,100) on credit, terms n/30. Wrote off $18,100 of uncollectible accounts receivable. Received $669,300 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.20% of accounts receivable will...

Liang Company began operations on January 1, 2016. During its first two years, the company completed...

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 Sold $1,345,400 of merchandise (that had cost $983,900) on credit, terms n/30. Wrote off $18,100 of uncollectible accounts receivable. Received $665,600 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 2.10% of accounts receivable will...

Liang Company began operations on January 1, 2016. During its first two years, the company completed...

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 Sold $1,354,000 of merchandise (that had cost $980,800) on credit, terms n/30. Wrote off $20,600 of uncollectible accounts receivable. Received $674,700 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 2.20% of accounts receivable will...

Liang Company began operations on January 1, 2016. During its first two years, the company completed...

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 Sold $1,351,100 of merchandise (that had cost $981,600) on credit, terms n/30. Wrote off $18,700 of uncollectible accounts receivable. Received $667,400 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 2.40% of accounts receivable will...

Liang Company began operations on January 1, 2017. During its first two years, the company completed...

Liang Company began operations on January 1, 2017. 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. 2017 Sold $1,353,300 of merchandise (that had cost $977,400) on credit, terms n/30. Wrote off $18,200 of uncollectible accounts receivable. Received $666,400 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.70% of accounts receivable will...

Liang Company began operations on January 1, 2017. During its first two years, the company completed...

Liang Company began operations on January 1, 2017. 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. 2017 Sold $1,348,400 of merchandise (that had cost $984,500) on credit, terms n/30. Wrote off $18,400 of uncollectible accounts receivable. Received $670,200 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.30% of accounts receivable will...

Liang Company began operations in Year 1. During its first two years, the company completed a...

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 $1,354,000 of merchandise (that had cost $981,600) on credit terms n/30. b. Wrote off $21,700 of uncollectible accounts receivable. c. Received $665,300 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.5%...

Liang Company began operations in Year 1. During its first two years, the company completed a...

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 Sold $1,345,434 of merchandise (that had cost $975,000) on credit, terms n/30. Wrote off $18,300 of uncollectible accounts receivable. Received $669,200 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.5% of accounts receivable would...

Liang Company began operations in Year 1. During its first two years, the company completed a...

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 Sold $1,352,200 of merchandise (that had cost $980,100) on credit, terms n/30. Wrote off $21,900 of uncollectible accounts receivable. Received $674,600 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.60% of accounts receivable would...

Liang Company began operations in Year 1. During its first two years, the company completed a...

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 $1,349,600 of merchandise (that had cost $977,600) on credit, terms n/30. b. Wrote off $19,500 of uncollectible accounts receivable. c. Received $669,000 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.10%...

Subjects