Question

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. S 2017 Book a. Sold $1,355,000 of merchandise (that had cost $981,200) on credit, terms n/30. b. Wrote off $21,300 of uncollectible accounts receivable. c. Received $669,500 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.10% of accounts receivable will be uncollectible Print ferences 2018 e. Sold $1,592,700 of merchandise on credit (that had cost $1,262,300), terms n/30. f. Wrote off $26,900 of uncollectible accounts receivable. g. Received $1107,900 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 2.10% of accounts receivable will be uncollectible.

Answer 1

Journal Entries are as follows:

Date	Account and Explanation	Debit($)	Credit($)
2017
a) - 1)	Account Receivable	1,355,000
	Sale		1,355,000
	(Recorded the sale on credit )
a) - 2)	Cost of goods Sold	981,200
	Merchandise Inventory		981,200
	(Recorded the Cost of goods Sold )
b)	Allowance for Account Receivable	21,300
	Account Receivable		21,300
	(Recorded the uncollectible account receivable)
c)	Cash	669,500
	Account Receivable		669,500
	(Recorded the cash received from customer )
d)	Bad Debt Expenses	35,248
	(1,355,000 - 21,300 - 669,500)*2.10% + 21,300
	Allowance for Account Receivable		35,248
	(Recorded the Bad Debt Expenses )
2018
e) - 1)	Account Receivable	1,592,700
	Sale		1,592,700
	(Recorded the sale made on credit )
e) - 2)	Cost of goods Sold	1,262,300
	Merchandise Inventory		1,262,300
	(Recorded the Cost of goods Sold )
f)	Allowance for Account Receivable	26,900
	Account Receivable		26,900
	(Recorded the witten off uncollectible account receivable)
g)	Cash	1,107,900
	Account Receivable		1,107,900
	(Recorded the collection of cash from customer)
h)	Bad Debt Expenses	36,516
	(1,592,700 - 26,900 - 1,107,900)*2.10% + 26,900
	Allowance for Account Receivable		36,516
	(Recorded the Allowance for Account Receivable )