Exercise 9-21 Complete the accounting cycle using long-term liability transactions (L09-2, 9-8) [The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances: Accounts Debit Credit Cash $ 13,200 Accounts Receivable 38,000 Inventory 154,000 Land 87,300 Buildings Allowance for Uncollectible Accounts 140,000 $ 3,800 Accumulated Depreciation 11,600 Accounts Payable 39,700 Common Stock 220,000 Retained Earnings 157,400 Totals $432,500 $432,500 During January 2021, the following transactions occur January Borrow $120,000 from Captive Credit Corporation. The installment note bears interest at 5% annually 1 and matures in 5 years. Payments of $2,265 are required at the end of each month for 6 months. January Receive $33,000 from customers on accounts receivable. 4 January Pay cash on accounts payable, $31,000. 10 January Pay cash for salaries, $30,900. 15 January Firework sales for the month total $206,000. Sales include $67,000 for cash and $139,800 on account. 30 The cost of the units sold is $12.580. January Pay the first monthly installment of $2,265 related to the $120,000 borrowed on January 1. Round your 31 interest calculation to the nearest dollar. = = = = The following information is available on January 31, 2021. 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 $26,000. b. The company estimates future uncollectible accounts. The company determines $5,000 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 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Unpaid salaries at the end of January are $28,100. d. Accrued income taxes at the end of January are $10,000 e. $21,757 of the long-term note payable balance will be pald over the next year. 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.) No Date Answer is complete but not entirely correct. General Journal Depreciation Expenso Accumulated Depreciation Debit Credit 1 January 31 950 950 O 2 January 31 1,680 3 Bad Debt Expense Allowance for Uncollectible Accounts 1,680 28,100 3 January 31 Salaries Expense Salaries Payable 28,100 Prey 2 CS 4 5 of 5 Next >