Exercise 7-21 Complete the accounting cycle using long-term asset transactions (L07-4, 7-7) (GL) On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Credit Debit $ 58,900 25,400 $ 2,400 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (52, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 36,500 14,400 157,000 15,000 222,000 52,800 $292,200 $ 292,200 During January 2021, the following transactions occur January 1 Purchase equipment for $19,700. The company estimates a residual value of $1,700 and a five-year service fe. January 4 Pay cash on accounts payable, $9,700. January 8 Purchase additional inventory on account, $84,900. January 15 Receive cash on accounts receivable, $22,200. January 19 Pay cash for salaries, $30,000. January 28 Pay cash for January utilities, $16,700. January 30 Sales for January total $222,000. All of these sales are on account. The cost of the units sold is $116,000. The following information is available on January 31, 2021. a. Depreciation on the equipment for the month of January is calculated using the straight-line method, b. The company estimates the amount of their uncollectible accounts. The company determines $3,200 out of the total accounts The following information is available on January 31, 2021. a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company estimates the amount of their uncollectible accounts. The company determines $3,200 out of the total accounts receivable shown on the General Ledger on January 31 is past due, and 50% of these past due amounts is estimated to be uncollectible. The remaining accounts receivable balance on January 31 is not past due, and 3% of these current accounts are estimated to be 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 $32,800. e. Accrued income taxes at the end of January are $9,200. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet 1. Record each of the transactions listed above in the 'General Journal tab (these are shown as items 1-8) assuming a FIFO perpetual inventory system. The transaction on January 30 requires two entries: one to record sales revenue and one to record cost of goods sold. Review the 'General Ledger and the Trial Balance' tabs to see the effect of the transactions on the account balances. 2. Record adjusting entries on January 31 in the 'General Journal' tab these are shown as items 9-13). 3. Review the adjusted Trial Balance as of January 31, 2021, in the 'Trial Balance' tab. 4. Prepare a multiple-step income statement for the period ended January 31, 2021, in the 'Income Statement' tab. 5. Prepare a classified balance sheet as of January 31, 2021, in the Balance Sheet' tab. 6. Record the closing entries in the 'General Journal' tab (these are shown as items 14 and 15)