Year 1

Sold $1,346,400 of merchandise on credit (that had cost $984,300), terms n/30.

Wrote off $20,400 of uncollectible accounts receivable.

Received $667,800 cash in payment of accounts receivable.

In adjusting the accounts on December 31, the company estimated that 1.40% of accounts receivable would be uncollectible.

Year 2

Sold $1,566,100 of merchandise (that had cost $1,304,200) on credit, terms n/30.

Wrote off $30,800 of uncollectible accounts receivable. Received $1,398,900 cash in payment of accounts receivable.

Received $1,398,900 cash in payment of accounts receivable.

In adjusting the accounts on December 31, the company estimated that 1.40% 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.)

Answer rating: 100% (QA)

Year 1 Journal Entries To record the sale of merchandise on credit Dr Accounts Receivable 1346400 Cr ... View the full answer