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

Accounts	Debit			Credit
Cash	$	13,200
Accounts Receivable		38,000
Inventory		154,000
Land		87,300
Buildings		140,000
Allowance for Uncollectible Accounts				$	3,800
Accumulated Depreciation					11,600
Accounts Payable					39,700
Common Stock					220,000
Retained Earnings					157,400
Totals	$	432,500		$	432,500

During January 2018, the following transactions occur:

January 1	Borrow $120,000 from Captive Credit Corporation. The installment note bears interest at 5% annually and matures in 5 years. Payments of $2,180 are required at the end of each month for 60 months.
January 4	Receive $33,000 from customers on accounts receivable.
January 10	Pay cash on accounts payable, $31,000.
January 15	Pay cash for salaries, $30,900.
January 30	Firework sales for the month total $206,000. Sales include $67,000 for cash and $139,000 on account. The cost of the units sold is $122,500.
January 31	Pay the first monthly installment of $2,180 related to the $120,000 borrowed on January 1. Round your interest calculation to the nearest dollar.

The following information is available on January 31, 2018.

1. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $26,000.
2. The company estimates future uncollectible accounts. The company determines $5,000 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable ending balance shown in the general ledger to start your calculations.) Record the estimated bad debt expense.
3. Unpaid salaries at the end of January are $28,100. (Recognize that salaries are owed, but have not been paid yet.)
4. Accrue income taxes at the end of January are $10,000. (Recognize that income taxes are due, but have not been paid yet.)

1.		Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 - 7) assuming a FIFO perpetual inventory system. The transaction on January 30 requires two entries: one to record sales revenue and one to record cost of goods sold. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances.
2.		Record adjusting entries on January 31. in the 'General Journal' tab (these are shown as items 8-11).

3.		Review the adjusted 'Trial Balance' as of January 31, 2018, in the 'Trial Balance' tab.
4.		Prepare a multiple-step income statement for the period ended January 31, 2018, in the 'Income Statement' tab.
5.		Prepare a classified balance sheet as of January 31, 2018, in the 'Balance Sheet' tab.
6.		Record the closing entries in the 'General Journal' tab (these are shown as items 12 and 13).