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On January 1, 2018, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Debit 22,100 Accounts Receivable 37,000 31,000 Land 63.100
On January 1, 2018, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Debit 22,100 Accounts Receivable 37,000 31,000 Land 63.100 Allowance for Uncollectible Accounts 3,300 Accounts Payable 31,900 Notes Payable (6%, due in 3 years) 31.000 Common Stock 57,000 Retained Earnings 30.000 153,200 153,200 Totals S The $31,000 beginning balance of inventory consists of 310 units, each costing $100. During January 2018, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,000 units for $106,000 on account ($106 each). January 8 Purchase 1,100 units for S122,100 on account (S111 each). January 12 Purchase 1,200 units for S139,200 on account ($116 each) January 15 Return 105 of the units purchased on January 12 because of defects. January 19 Sell 3,400 units on account for S544,000. The cost of the units sold is determined using a FlFO perpetual inventory system. January 22 Receive $489,000 from customers on accounts receivable. January 24 Pay $319,000 to inventory suppliers on accounts payable. January 27 Wite of accounts receivable as uncollectible, S2,600. January 31 Pay cash for salaries during January, $115,000 The following information is available on January 31, 2018. a. At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only S100 each. b. At the end of January, $4,100 of accounts receivable are past due, and the company estimates that 45% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 5% w not be collected. c. Accrued interest expense on notes payable for January Interest is expected to be paid each December 31. d. Accrued income taxes at the end of January are $12,400
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