Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cullumber Company's balance sheet at December 31, 2021, is presented below. Cullumber Company Balance Sheet December 31, 2021 Cash $13300 Accounts payable $9520 Accounts receivable

image text in transcribedimage text in transcribed

Cullumber Company's balance sheet at December 31, 2021, is presented below. Cullumber Company Balance Sheet December 31, 2021 Cash $13300 Accounts payable $9520 Accounts receivable 19300 Common stock 19900 Allowance for doubtful accounts (840) Retained earnings 11430 Inventory 9090 $40850 $40850 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 $6000 account. 3 Cullumber wrote off as uncollectible the accounts of Walter Corporation ($400) and Drake Company ($300). 8 Cullumber purchased $15530 of inventory on account. 11 Cullumber sold for $26400 on account inventory that cost $17530. 15 Cullumber sold inventory that cost $720 to Jack Rice for $900. Rice charged this amount on his Visa First Bank card. The service fee charged Cullumber by First Bank is 3%. 17 Cullumber collected $23600 from customers on account. 21 Cullumber paid $16130 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 $1280 cash. 31 Cullumber paid other operating expenses, $3170. 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 $540 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.) Jan. 31 ^ (1) Interest Receivable Interest Revenue Bad Debts Expense Allowance for Doubtful Accounts Supplies 540 Supplies Expense 540 (4) Income Tax Expense Income Taxes Payable

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions