Question
AccountsDebitCreditCash$26,300Accounts Receivable48,600Allowance for Uncollectible Accounts$5,400Inventory21,200Land58,000Equipment21,000Accumulated Depreciation2,700Accounts Payable29,700Notes Payable (6%, due April 1, 2022)62,000Common Stock47,000Retained Earnings28,300Totals$175,100$175,100 During January 2021, the following transactions occur: January2Sold gift cards
AccountsDebitCreditCash$26,300Accounts Receivable48,600Allowance for Uncollectible Accounts$5,400Inventory21,200Land58,000Equipment21,000Accumulated Depreciation2,700Accounts Payable29,700Notes Payable (6%, due April 1, 2022)62,000Common Stock47,000Retained Earnings28,300Totals$175,100$175,100
During January 2021, the following transactions occur:
January2Sold gift cards totaling $10,400. The cards are redeemable for merchandise within one year of the purchase date.January6Purchase additional inventory on account, $159,000.January15Firework sales for the first half of the month total $147,000. All of these sales are on account. The cost of the units sold is $79,800.January23Receive $126,600 from customers on accounts receivable.January25Pay $102,000 to inventory suppliers on accounts payable.January28Write off accounts receivable as uncollectible, $6,000.January30Firework sales for the second half of the month total $155,000. Sales include $11,000 for cash and $144,000 on account. The cost of the units sold is $85,500.January31Pay cash for monthly salaries, $53,200.
- Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a residual value of $4,200 and a two-year service life.
- The company estimates future uncollectible accounts. The company determines $23,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
- Accrued interest expense on notes payable for January.
- Accrued income taxes at the end of January are $14,200.
- By the end of January, $4,200 of the gift cards sold on January 2 have been redeemed.
2.Record the adjusting entries on January 31 for the above transactions
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