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Exercise 9-21 Complete the accounting cycle using long-term liability transactions (LO9-2, 9-8) [The following information applies to the questions displayed below.] On January 1, 2021,

Exercise 9-21 Complete the accounting cycle using long-term liability transactions (LO9-2, 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 $ 11,200
Accounts Receivable 34,000
Allowance for Uncollectible Accounts $ 1,800
Inventory 152,000
Land 67,300
Buildings 120,000
Accumulated Depreciation 9,600
Accounts Payable 17,700
Common Stock 200,000
Retained Earnings 155,400
Totals $ 384,500 $ 384,500

During January 2021, the following transactions occur:

January 1 Borrow $100,000 from Captive Credit Corporation. The installment note bears interest at 7% annually and matures in 5 years. Payments of $1,980 are required at the end of each month for 60 months.
January 4 Receive $31,000 from customers on accounts receivable.
January 10 Pay cash on accounts payable, $11,000.
January 15 Pay cash for salaries, $28,900.
January 30 Firework sales for the month total $195,000. Sales include $65,000 for cash and $130,000 on account. The cost of the units sold is $112,500.
January 31 Pay the first monthly installment of $1,980 related to the $100,000 borrowed on January 1. Round your interest calculation to the nearest dollar.

Exercise 9-21 Part 5

5. Prepare a classified balance sheet as of January 31, 2021. (Hint: The carrying value of notes payable on January 31, 2021 is $98,603; $17,411 is reported as notes payable in the current liabilities section and $81,192 is reported as notes payable in the long-term liabilities section ($17, 411 + $81,192 = $98,603). (Amounts to be deducted should be indicated with a minus sign.)

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9 Required information iassitied Baiance She January 31, 2021 Assets Liabilities Total Current Liabilities Total Liabilities Stockholder's Equity Total Current Assets Total Stockholders' Equity Total Liabilities and Stockholders' Equity Total Assets

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