Business, 10.12.2021 03:10 885122bah

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 $1,346,200 of merchandise (that had cost $976,400) on credit, terms n/30.
Wrote off $20,700 of uncollectible accounts receivable. Received $670,500 cash in payment of accounts receivable.
In adjusting the accounts on December 31, the company estimated that 2.00% of accounts receivable would be uncollectible.

Year 2:

Sold $1,599,900 of merchandise (that had cost $1,304,800) on credit, terms n/30.
Wrote off $28,300 of uncollectible accounts receivable.
Received $1,219,300 cash in payment of accounts receivable.
In adjusting the accounts on December 31, the company estimated that 2.00% 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.

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