Exercise 9-19 On January 1, 2018, the general ledger of Freedom Fireworks includes the following account balances: Accounts Cash Accounts Receivable Inventory Land Buildings Allowance for Uncollectible Accounts Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Debit Credit 12,600 36,800 53,400 81,300 134,000 $ 3,200 11,000 33,100 214,000 156,800 Totals $418,100 $418,100 During January 2018, the following transactions occur: January 1 Borrow $114,000 from Captive Credit Corporation. The installment note bears interest at 5% annually and matures in 5 years. Payments of $2,120 are required at the end of each month for 60 months. January 4 Receive $32,400 from customers on accounts receivable. January 10 Pay cash on accounts payable, $25,000 January 15 Pay cash for salaries, $30,300. January 30 Firework sales for the month total $201,400. Sales include $66,400 for cash and $135,000 on account. The cost of the units sold is $119,500 January 31 Pay the first monthly installment of $2,120 related to the $114,000 borrowed on January 1 Round your interest calculation to the nearest dollar. The following information is available on January 31, 2018. During January 2018, the following transactions occur January 1 Borrow $114,000 from Captive Credit Corporation. The installment note bears interest at 5% annually and matures in 5 years. Payments of $2,120 are required at the end of each month for 60 months. January 4 Receive $32,400 from customers on accounts receivable January 10 Pay cash on accounts payable, $25,000 January 15 Pay cash for salaries, $30,300 January 30 Firework sales for the month total $201,400. Sales include $66,400 for cash and $135,000 on account. The cost of the units sold is $119,500 Round your interest calculation to the nearest dollar. January 31 Pay the first monthly instailment of $2,120 related to the $114,000 borrowed on January 1 The following information is available on January 31, 2018 a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $25,400 b. The company estimates future unco ectible accounts. The or any deter nes S4,4 o accounts rece va le on January 31 are past due, and 50% of these able on January 31 are not pas de, and 2% of these accounts are estimated to be accounts are estimated to be uncollectible. The remaining accounts rece uncollectible. (Hint: Use the January 31 accounts receivable ending balance shown in the general ledger to start your calculations.) Record the estimated bad debt expense c. Unpaid salaries at the end of January are $27,500. (Recognize that salaries are owed, but have not been paid yet.) d. Accrue income taxes at the end of January are $9,400. (Recognize that income taxes are due, but have not been paid yet.) GeneralTrial Balance Statement Income Balance Sheet Analysis Requirement ournal Genitral If no entry is required for a transaction/event, select "No journal entry required" in the first account field View transaction list View journal entry worksheet No Date Account Title Debit Credit Jan 01 Cash 14,000
