On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances:

Accounts	Debit			Credit
Cash	$	25,100
Accounts Receivable		46,200
Inventory		20,000
Land		66,000
Equipment		15,000
Allowance for Uncollectible Accounts				$	4,200
Accumulated Depreciation					1,500
Accounts Payable					28,500
Notes Payable (6%, due April 1, 2019)					50,000
Warranty Liability					30,000
Common Stock					35,000
Retained Earnings					23,100
Totals	$	172,300		$	172,300

During January 2018, the following transactions occur:

January		2		Sold gift cards totaling $8,000. The cards are redeemable for fireworks set-up services within one year of the purchase date.
January		6		Purchase additional inventory on account, $147,000.
January		15		Firework sales for the first half of the month total $135,000. All of these sales are on account. The cost of the units sold is $73,800.
January		20		ACME paid a warranty claim of $25,000.
January		23		Receive $125,400 from customers on accounts receivable.
January		25		Pay $90,000 to inventory suppliers on accounts payable.
January		28		Write off accounts receivable as uncollectible, $4,800.
January		30		Firework sales for the second half of the month total $143,000. Sales include $11,000 for cash and $132,000 on account. The cost of the units sold is $79,500.
January		31		Pay cash for monthly salaries, $52,000.

The following information is available on January 31, 2018.

1. 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 $3,000 and a two-year service life.
2. ACME provides a quality assurance warranty on all sales, and estimates the liability associated with the warranty to be 10% of sales revenue. ACME accrues warranty expense on the last day of each month. The warranty liability covers the life of the product and so is classified as non-current.
3. During January an appeals court ruled against ACME in a lawsuit involving a customer injury. The customer sued ACME for damages following a firework mishap. ACME now believes it is probable that it will incur a $15,000 loss associated with the claim, but it intends to pursue further appeal and the case could drag on for another couple of years.
4. During January a customer sued ACME for damages after inadvertently igniting a Vesuvius Spark Fountain in his backpack. ACME believes the probability of incurring a loss on the claim to be remote.
5. At the end of January, $11,000 of accounts receivable are past due, and the company estimates that 30% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 5% will not be collected.
6. ACME accrued interest expense on notes payable for January.
7. ACME accrued income taxes at the end of January are $6,000.
8. By the end of January, $3,000 of the gift cards sold on January 2 have been redeemed for fireworks set-up services.

Requirements:

1. Record each of the transactions shown above in appropriate general journal accounts, assuming a FIFO perpetual inventory system.
2. Record adjusting entries on January 31.
3. Post the journal entries to the general ledger (t-accounts).
4. Prepare a trial balance.