Reference no: EM132215624

Question - 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

1. Sold $1,349,300 of merchandise (that had cost $985,000) on credit, terms n/30.

2. Wrote off $19,100 of uncollectible accounts receivable.

3. Received $669,000 cash in payment of accounts receivable.

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

2017

1. Sold $1,522,400 of merchandise (that had cost $1,304,200) on credit, terms n/30.

2. Wrote off $31,400 of uncollectible accounts receivable.

3. Received $1,128,000 cash in payment of accounts receivable.

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

Required: Prepare journal entries to record Liang's 2016 and 2017 summarized transactions and its year-end adjustments to record bad debts expense.