Exercise 8-18 Complete the accounting cycle (LO8-1, 8-2, 8-4, 8-6) [The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Credit Debit $ 25,400 46,800 $ 4,500 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2022) Common Stock Retained Earnings Totals 20,300 49,000 16,500 1,800 28,800 53,000 38,000 31,900 $158,000 $ 158,000 During January 2021, the following transactions occur. January 2 Sold gift cards totaling $8,600. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $150,000. January 15 Firework sales for the first half of the month total $138,000. All of these sales are on account. The cost of the units sold is $75,300. January 23 Receive $125,700 from customers on accounts receivable. January 25 Pay $93,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $5,100. January 30 Firework sales for the second half of the month total $146,000. Sales include $18,000 for cash and $128,000 on account. The cost of the units sold is $81,000. January 31 Pay cash for monthly salaries, $52,300. Exercise 8-18 Part 2 Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a residual value of $3,300 and a two-year service life. The company estimates future uncollectible accounts. The company determines $14,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) Accrued interest expense on notes payable for January Accrued income taxes at the end of January are $13,300. By the end of January, $3,300 of the gift cards sold on January 2 have been redeemed. 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) Required information No Date Debit Credit 1 January 31 General Journal Depreciation Expense Accumulated Depreciation 550 550 2 January 31 Bad Debt Expense Allowance for Uncollectible Accounts 3 January 31 Interest Expense Interest Payable 4 January 31 13,300 Income Tax Expense Income Tax Payable 13,300 5 January 31 Deferred Revenue 3,300 Sales Revenue 3,300