On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances Accounts Debit Credit Cash $ 26,600 Accounts Receivable 49,200 Allowance for Uncollectible Accounts $ 5,700 Inventory 21,500 Land 61,000 Equipment 22,500 Accumulated Depreciation 3,000 Accounts Payable 30,000 Notes Payable (6 , due April 1, 2019) 65,000 Common Stock 50,000 Retained Earnings 27,100 Totals $ 180,800 $ 180,800 During January 2018, the following transactions occur January 2 Sold gift cards totaling $11,000 The cards are redeemable for merchandise within one year of the purchase date January 6 Purchase additional inventory on account, $162,000 January 15 Firework sales for the first half of the month total $150,000 All of these sales are on account The cost of the units sold is $81,300 January 23 Receive $126,900 from customers on accounts receivable January 25 Pay $105,000 to inventory suppliers on accounts payable January 28 Write off accounts receivable as uncollectible, $6,300 January 30 Firework sales for the second half of the month total $158,000 Sales include $14,000 for cash and $144,000 on account The cost of the units sold is $87,000 January 31 Pay cash for monthly salaries, $53,500 The following information is available on January 31, 2018 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 $4,500 and a two year service life The company estimates future uncollectible accounts At the end of January, considering the total ending balance of the accounts receivable account shown in the general ledger, $26,000 is now past due (older than 90 days), while the remainder of the balance is current (less than 90 days old) The company estimates that 30 of the past due balance will be uncollectible and only 4 of the current balance will become uncollectible Please record the estimated bad debt expense Accrue the interest expense on notes payable for January (Hint recognize the expense and add as a liability, since the interest expense has not been paid yet) Accrue income taxes at the end of January are $14,500 (Hint recognize the expense and add as a liability, since the income taxes have not been paid yet) By the end of January, $4,500 of the gift cards sold on January 2 have been redeemed

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Posted on Sep 16, 2024

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

Accounts	Debit		Credit
Cash	$	26,600
Accounts Receivable		49,200
Allowance for Uncollectible Accounts			$	5,700
Inventory		21,500
Land		61,000
Equipment		22,500
Accumulated Depreciation				3,000
Accounts Payable				30,000
Notes Payable (6%, due April 1, 2019)				65,000
Common Stock				50,000
Retained Earnings				27,100

Totals	$	180,800	$	180,800

During January 2018, the following transactions occur:

January 2	Sold gift cards totaling $11,000. The cards are redeemable for merchandise within one year of the purchase date.
January 6	Purchase additional inventory on account, $162,000.
January 15	Firework sales for the first half of the month total $150,000. All of these sales are on account. The cost of the units sold is $81,300.
January 23	Receive $126,900 from customers on accounts receivable.
January 25	Pay $105,000 to inventory suppliers on accounts payable.
January 28	Write off accounts receivable as uncollectible, $6,300.
January 30	Firework sales for the second half of the month total $158,000. Sales include $14,000 for cash and $144,000 on account. The cost of the units sold is $87,000.
January 31	Pay cash for monthly salaries, $53,500.

The following information is available on January 31, 2018.

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 $4,500 and a two-year service life.
The company estimates future uncollectible accounts. At the end of January, considering the total ending balance of the accounts receivable account shown in the general ledger, $26,000 is now past due (older than 90 days), while the remainder of the balance is current (less than 90 days old). The company estimates that 30% of the past due balance will be uncollectible and only 4% of the current balance will become uncollectible. Please record the estimated bad debt expense.
Accrue the interest expense on notes payable for January. (Hint: recognize the expense and add as a liability, since the interest expense has not been paid yet)
Accrue income taxes at the end of January are $14,500. (Hint: recognize the expense and add as a liability, since the income taxes have not been paid yet)
By the end of January, $4,500 of the gift cards sold on January 2 have been redeemed.