Exercise 7-21B Complete the accounting cycle using long-term asset transactions (LO7-4, 7-7) [The following information applies to the questions displayed below.] On January 1, Year 1, the general ledger of a company includes the following account balances: Accounts Debit Credit Cash $ 59,800 Accounts Receivable 27,200 Allowance for Uncollectible Accounts $ 3,300 Inventory 37,400 Notes Receivable (5%, due in 2 years) 25,200 Land 166,000 Accounts Payable 15,900 Common Stock 231,000 Retained Earnings 65,400 Totals $ 315,600 $ 315,600 During January Year 1, 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 Sales for January total $231,000. All of these sales are on account. The cost of the units sold is $120,500. Information for adjusting entries: Depreciation on the equipment for the month of January is calculated using the straight-line method. The company estimates future uncollectible accounts. The company determines $4,100 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be 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. rev: 11_22_2018_QC_CS-148298, 06_13_2019_QC_CS-170054 Exercise 7-21B

Part 7 7. Analyze how well the company manages its assets: