Chapter 5 General Ledger Accounting Cycle

On January 1, 2018, the general ledger of 3D Family Fireworks includes the following account balances:

Accounts		Debit		Credit
Cash		$ 23,900
Accounts Receivable		13,600
Supplies		2,500
Notes Receivable (6%, due in 2 years)		20,000
Land		77,000
Allowance for Uncollectible Accounts				$ 1,400
Accounts Payable				7,200
Common Stock				96,000
Retained Earnings				32,400
Totals		$137,000		$137,000

During January 2018, the following transactions occur:

January 2	Provide services to customers for cash, $35,100.
January 6	Provide services to customers on account, $72,400.
January 10	Write off accounts receivable as uncollectible, $1,000.
January 20	Pay cash for salaries, $31,400.
January 22	Receive cash on accounts receivable, $70,000.
January 25	Pay cash on accounts payable, $5,500.
January 30	Pay cash for utilities during January, $13,700.

1.		Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 - 7). Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances.
2.		Record the adjusting entries in the 'General Journal' tab (these are shown as items 8-11).

a.		At the end of the year, $5,000 of accounts receivable are past due, and the company estimates that 20% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 5% will not be collected. The note receivable of $20,000 is considered fully collectible and therefore is not included in the estimate of uncollectible accounts.
b.		Supplies at the end of January total $700.
c.		Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31.
d.		Unpaid salaries at the end of January are $33,500.

3.		Review the adjusted 'Trial Balance' as of January 31, 2018.
4.		Prepare an income statement for the period ended January 31, 2018, in the 'Income Statement' tab.
5.		Prepare a classified balance sheet as of January 31, 2018 in the 'Balance Sheet' tab.
6.		Record the closing entries in the 'General Journal' tab (these are shown as items 12 and 13).
7.		Using the information from the requirements above, complete the 'Analysis' tab.