1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Gemiola [76]
3 years ago
7

Liang Company began operations on January 1, 2017. During its first two years, the company completed a number of transactions in

volving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. 2017 Sold $1,351,700 of merchandise (that had cost $981,800) on credit, terms n/30. Wrote off $21,500 of uncollectible accounts receivable. Received $670,400 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 3.00% of accounts receivable will be uncollectible. 2018 Sold $1,586,800 of merchandise on credit (that had cost $1,326,300), terms n/30. Wrote off $25,300 of uncollectible accounts receivable. Received $1,182,900 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 3.00% of accounts receivable will be uncollectible. Required: Prepare journal entries to record Liang’s 2017 and 2018 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.)
Business
1 answer:
erica [24]3 years ago
7 0

Answer:

Liang Company

Journal entries to record Liang’s 2017 and 2018 summarized transactions and its year-end adjustments to record bad debts expense (using the perpetual inventory system and applying allowance method for accounts receivable)

1. 2017 Journal entries:

Debit Accounts Receivable with $1,351,700

Credit Sales Account with $1,351,700

To record sales on credit, terms n/30.

Debit Cost of Goods Sold with $981,800

Credit Inventory Account with $981,800

To record cost of goods sold.

Debit Uncollectible Expense Account with $2,150

Credit Accounts Receivable with $2,150

To write off uncollectible accounts receivable.

Debit Cash with $670,400

Credit Accounts Receivable with $670,400

To record cash received on account.

December 31:

Debit Uncollectible Expense Account with $20,374.50

Credit Allowance for Uncollectible Account with $20,374.50

To record 3% allowance for accounts receivable balance.

2. 2018 Journal entries:

Debit Accounts Receivable with $1,586,800

Credit Sales Account with $1,586,800

To record sales on credit, terms n/30.

Debit Cost of Goods Sold with $1,326,300

Credit Inventory Account with $1,326,300

To record cost of goods sold.

Debit Allowance for Uncollectible Account with $25,300

Credit Accounts Receivable with $25,300

To write off uncollectible accounts receivable.

Debit Cash with $1,182,900

Credit Accounts Receivable with $1,182,900

To record cash received on account.

December 31:

Debit Uncollectible Expense Account with $36,658

Credit Allowance for Uncollectible Account with $36,658

To bring the allowance for accounts receivable balance to 3%.

Explanation:

1. Using the perpetual inventory system where transactions are recorded to inventory immediately and not at period-end, the sales transactions will reduce the balance of the inventory account with the cost of sales and increase the cost of sales with the same amount.  The Sales account is increased by sales value while the Accounts Receivable is also increased with the same amount.

2. The write-off is initially charged to the uncollectible expense account directly in 2017 but subsequently, it will be debited to the Allowance of Uncollectible account, applying the allowance method.

3. The perpetual inventory system, inventory transactions are recognized in the inventory and cost of goods sold accounts immediately and not at period-end like the periodic inventory system, which waits until inventory count to recognize transactions.

You might be interested in
"You've been specially selected to win our grand prize. Contact us to collect it!" This is an example of a _____.
Setler79 [48]
The pitch....for a sales and marketing item or scam.
5 0
2 years ago
Read 2 more answers
Instead of living in a service economy, we now live in a(n) ________ economy.
Nataly [62]

Instead of living in a service economy, we now live in a(n)  Mixed economy.

Explanation:

  • A mixed economy consist of  both private and government /state owned economies which  share control of owning, making, selling, and exchanging good in the country.
  • U.S. and France are two example of Mixed Economy
3 0
2 years ago
Mackie Services operates a website that links experienced statisticians with businesses that need data analyzed. Statisticians p
jasenka [17]

Answer:

d. Revenue of $375

Explanation:

The amount paid by the Vetmed associates is an expense for associates

The amount received by statisticians is a revenue for them

Mackie Services an intermediate between the two and so, the percentage amount received by Mackie Services is a revenue

Mackie's income statement would include a revenue of:

= Amount paid to statisticians * % Received

= $1,500 * 25%

= $375

6 0
3 years ago
In order to be effective control must be
Vanyuwa [196]

...evaluated through organising questionnaires in the organization.

3 0
3 years ago
What was a part of the emerging social, political, and economic philosophies that characterized the first hundred days of Frankl
Anastaziya [24]

Answer:

"Try something and if it doesn't work, admit it and try something else."

Explanation:

When I took US Government, my teacher always emphasized that FDR was probably the best American President, and things like this really show why he admired him so much. Can you imagine those words coming out of the mouth of a modern politician?

Many people like to compare President Obama's first term with FDR's first term, but I believe that Obama had it easier. Not because the recession wasn't bad, but because it was fresh and new. President Bush's handling of the crisis was disastrous, but they messed up only for about one year. When FDR took office, the depression had been around for several years, so the negative effects were much greater.

When FDR took office the country was ravaged and nobody was sure that the new policies would work or not, or even what policies they should have implemented. That is why they engaged in a trial and error type of strategy where several options were explored to try to see what could work and what couldn't.

8 0
3 years ago
Other questions:
  • Brad, an employee for a sports marketing firm, feels he has been treated unfairly by the organization. He helped three other emp
    5·1 answer
  • Drag the tiles to the correct boxes to complete the pairs.Match the specifications to the criteria that the bank looks into befo
    7·1 answer
  • Future Motors is expected to pay a $3.30 a share annual dividend next year. Dividends are expected to increase by 2.75 percent a
    6·1 answer
  • When sending a resume to companies without seeing a job opening, it's best to send the same ones out
    7·2 answers
  • A small grocery store sells fresh produce, which it obtains from a local farmer. During the strawberry season, demand for fresh
    7·1 answer
  • .Academic studies suggest that the amount people tip at restaurants is only slightly related to the quality of service, and that
    13·1 answer
  • In the month of November, Oriole Company Inc. wrote checks in the amount of $10,410. In December, checks in the amount of $11,07
    15·1 answer
  • Explain the requirements for a redemption to pay death taxes. What are the tax consequences of a redemption to pay death taxes f
    11·1 answer
  • True or False: While monitoring any online conversations about its brand, a company should also monitor the search results that
    12·1 answer
  • when revenue is greater than total expenses, resulting in a net income, the income summary account has a
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!