General Journal

January 2 Sold gift cards totaling $12,000. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $164,000. ACME uses the perpetual inventory system. January 15 Firework sales for the first half of the month total $125,400. All of these sales are on account. The cost of the units sold is $76,000. January 23 Receive $112,000 from customers on accounts receivable. January 25 Pay $48,500 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $3,600. January 30 Firework sales for the second half of the month total $132,000. Sales include $61,000 for cash and $71,000 on account. The cost of the units sold is $79,500. January 31 Pay cash for monthly salaries, $52,000.

Adjusting Entires

The company estimated a residual value of $2,000 and a four-year service life. b. The company records an adjusting entry for $10,700 for estimated future uncollectible accounts. c. The company has accrued interest on notes payable for January. d. The company accrued income taxes at the end of January of $6,150. e. By the end of January, $6,000 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold).