Question
Cullumber Companys balance sheet at December 31, 2021, is presented below. Adjustment data: 1. Interest is recorded for the month on the note from January
Cullumber Companys balance sheet at December 31, 2021, is presented below.
Adjustment data:
1. | Interest is recorded for the month on the note from January 1. | |
2. | Bad debts are expected to be 6% of the January 31, 2022, accounts receivable. | |
3. | A count of advertising supplies on January 31, 2022, reveals that $510 remains unused. | |
4. | The income tax rate is 30%. (Hint: Prepare the income statement up to Income before taxes and multiply by 30% to compute the amount; round to whole dollars.) |
Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual inventory system.) (Round answers to 0 decimal places, e.g. 1,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Please answer the above boxes in red. All of the other journal entries are complete and correct.
Prepare an adjusted trial balance at January 31, 2022. (Round answers to 0 decimal places, e.g. 1,250.)
Prepare an income statement for the month ending January 31, 2022. (Round answers to 0 decimal places, e.g. 1,250.)
Prepare a retained earnings statement for the month ending January 31, 2022. (Round answers to 0 decimal places, e.g. 1,250.)
Prepare a classified balance sheet as of January 31, 2022. (List Current Assets in order of liquidity. Round answers to 0 decimal places, e.g. 1,250.)
Cullumber Company Balance Sheet December 31, 2021 Cash $13,310 Accounts payable $8,900 Accounts receivable 20,100 Common stock 18,800 Allowance for doubtful accounts (720) Retained earnings 14,810 Inventory 9,820 $42,510 $42,510 During January 2022, the following transactions occurred. Cullumber uses the perpetual inventory method. Jan. 1 Cullumber accepted a 4-month, 8% note from Betheny Company in payment of Betheny's $4,800 account. 3 Cullumber wrote off as uncollectible the accounts of Walter Corporation ($500) and Drake Company ($300). 8 Cullumber purchased $15,760 of inventory on account. 11 Cullumber sold for $26,200 on account inventory that cost $18,330. 15 Cullumber sold inventory that cost $750 to Jack Rice for $1,100. Rice charged this amount on his Visa First Bank card. The service fee charged Cullumber by First Bank is 3%. 17 Cullumber collected $21,700 from customers on account. 21 Cullumber paid $15,900 on accounts payable. 24 Cullumber received payment in full ($300) from Drake Company on the account written off on January 3. 27 Cullumber purchased advertising supplies for $1,400 cash. 31 Cullumber paid other operating expenses, $3,260. Jan. 31 ^ Interest Receivable Interest Revenue Bad Debts Expense Allowance for Doubtful Accounts Supplies Expense 890 Supplies 890 Income Tax Expense Income Taxes Payable Cullumber Company Balance Sheet December 31, 2021 Cash $13,310 Accounts payable $8,900 Accounts receivable 20,100 Common stock 18,800 Allowance for doubtful accounts (720) Retained earnings 14,810 Inventory 9,820 $42,510 $42,510 During January 2022, the following transactions occurred. Cullumber uses the perpetual inventory method. Jan. 1 Cullumber accepted a 4-month, 8% note from Betheny Company in payment of Betheny's $4,800 account. 3 Cullumber wrote off as uncollectible the accounts of Walter Corporation ($500) and Drake Company ($300). 8 Cullumber purchased $15,760 of inventory on account. 11 Cullumber sold for $26,200 on account inventory that cost $18,330. 15 Cullumber sold inventory that cost $750 to Jack Rice for $1,100. Rice charged this amount on his Visa First Bank card. The service fee charged Cullumber by First Bank is 3%. 17 Cullumber collected $21,700 from customers on account. 21 Cullumber paid $15,900 on accounts payable. 24 Cullumber received payment in full ($300) from Drake Company on the account written off on January 3. 27 Cullumber purchased advertising supplies for $1,400 cash. 31 Cullumber paid other operating expenses, $3,260. Jan. 31 ^ Interest Receivable Interest Revenue Bad Debts Expense Allowance for Doubtful Accounts Supplies Expense 890 Supplies 890 Income Tax Expense Income Taxes PayableStep by Step Solution
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