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Chapter 6 General Ledger Accounting Cycle On January 1, 2018, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Debit Credit
Chapter 6 General Ledger Accounting Cycle
On January 1, 2018, the general ledger of Big Blast Fireworks includes the following account balances: |
Accounts | Debit | Credit | ||
Cash | $ 21,900 | |||
Accounts Receivable | 36,500 | |||
Inventory | 30,000 | |||
Land | 61,600 | |||
Allowance for Uncollectible Accounts | $ 3,100 | |||
Accounts Payable | 32,400 | |||
Notes Payable (8%, due in 3 years) | 30,000 | |||
Common Stock | 56,000 | |||
Retained Earnings | 28,500 | |||
Totals | $150,000 | $150,000 | ||
The $30,000 beginning balance of inventory consists of 300 units, each costing $100. During January 2018, Big Blast Fireworks had the following inventory transactions: |
January 3 | Purchase 1,200 units for $126,000 on account ($105 each). | ||||||||||||||||||
January 8 | Purchase 1,300 units for $143,000 on account ($110 each). | ||||||||||||||||||
January 12 | Purchase 1,400 units for $161,000 on account ($115 each). | ||||||||||||||||||
January 15 | Return 100 of the units purchased on January 12 because of defects. | ||||||||||||||||||
January 19 | Sell 4,000 units on account for $600,000. The cost of the units sold is determined using a FIFO perpetual inventory system. | ||||||||||||||||||
January 22 | Receive $580,000 from customers on accounts receivable. | ||||||||||||||||||
January 24 | Pay $410,000 to inventory suppliers on accounts payable. | ||||||||||||||||||
January 27 | Write off accounts receivable as uncollectible, $2,500. | ||||||||||||||||||
January 31 | Pay cash for salaries during January, $128,000
Required:
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