During January 2018, the following transactions occur: January 1 Purchase equipment for $20,600. The company estimates a residual value of $2,600 and a five-year service life. January 4 Pay cash on accounts payable, $10,600. January 8 Purchase additional inventory on account, $93,900. January 15 Receive cash on accounts receivable, $23,100 January 19 Pay cash for salaries, $30,900. January 28 Pay cash for January utilities, $17,600. January 30 Firework sales for January total $231,000. All of these sales are on account. The cost of the units sold is $120,500. The following information is available on January 31, 2018. Depreciation on the equipment for the month of January is calculated using the straight-line method. The company estimates future uncollectible accounts. At the end of January, considering the total ending balance of the accounts receivable account, $4,100 is now past due (older than 90 days), while the remainder of the balance is current (less than 90 days old). The company estimates that 50% of the past due balance will be uncollectible and only 3% of the current balance will become uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) Accrued interest revenue on notes receivable for January. Unpaid salaries at the end of January are $33,700. Accrued income taxes at the end of January are $10,100
On January 1, 2018, the general ledger of TNT Fireworks includes the following ending account balances: Debit Credit Cash Accounts Receivable $ 59,800 27.200 37.400 25,200 166,000 Notes Receivable (5%, due in 2 years) Land Allowance for Uncollectible Accounts Accounts Payable Common Stock Retained Earning 3,300 15,900 231,000 65,400 Totals $315,600 $315,600 During January 2018, the following transactions occur: January 1 Purchase equipment for $20,600. The company estimates a residual value of S2,600 anda five-year service life January 4 Pay cash on accounts payable, $10,600. January 8 Purchase additional inventory on account, $93,900 January 15 Receive cash on accounts receivable, $23,100 January 19 Pay cash for salaries, $30,900. January 28 Pay cash for January utilities, $17,600 January 30 Firework sales for January total $231,000. All of these sales are on account. The cost of the units sold is $120,500 The following information is available on January 31, 2018. a. Depreciation on the equipment for the month of January is calculated using the straight-line method b. The company estimates future uncollectible accounts. At the end of January, considering the total ending balance of the accounts receivable account, $4,100 is now past due (older than 90 days), while the remainder of the balance is current (less than 90 days old). The company estimates that 50% of the past due balance will be uncollectible and only 3% of the current balance will become uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest revenue on notes receivable for January d. Unpaid salaries at the end of January are $33,700 e. Accrued income taxes at the end of January are $10,100 On January 1, 2018, the general ledger of TNT Fireworks includes the following ending account balances: Debit Credit Cash Accounts Receivable $ 59,800 27.200 37.400 25,200 166,000 Notes Receivable (5%, due in 2 years) Land Allowance for Uncollectible Accounts Accounts Payable Common Stock Retained Earning 3,300 15,900 231,000 65,400 Totals $315,600 $315,600 During January 2018, the following transactions occur: January 1 Purchase equipment for $20,600. The company estimates a residual value of S2,600 anda five-year service life January 4 Pay cash on accounts payable, $10,600. January 8 Purchase additional inventory on account, $93,900 January 15 Receive cash on accounts receivable, $23,100 January 19 Pay cash for salaries, $30,900. January 28 Pay cash for January utilities, $17,600 January 30 Firework sales for January total $231,000. All of these sales are on account. The cost of the units sold is $120,500 The following information is available on January 31, 2018. a. Depreciation on the equipment for the month of January is calculated using the straight-line method b. The company estimates future uncollectible accounts. At the end of January, considering the total ending balance of the accounts receivable account, $4,100 is now past due (older than 90 days), while the remainder of the balance is current (less than 90 days old). The company estimates that 50% of the past due balance will be uncollectible and only 3% of the current balance will become uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest revenue on notes receivable for January d. Unpaid salaries at the end of January are $33,700 e. Accrued income taxes at the end of January are $10,100
