On January 1, 2018, the general ledger of Freedom Fireworks includes the following account balances: Accounts Cash Accounts Recelvable Inventony Land Bulldings Allowance for Uncollectible Accounts Accumulated Depreclation Accounts Payable Common Stock Retained Earnings Debit $ 13.200 38,000 154,000 87.300 140,000 Credit $ 3,800 11,600 39,700 220,000 157,400 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 $2180 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 Date General Journal Debit Credit January 01 Cash 120,000 Accounts payable 120,000 January 04 Cash 33,000 Accounts receivable 33,000 January 10 Accounts payable 31,000 Cash 31,000 4 January 15 Salaries expense 30,900 Cash 30,900 January 30 Cash 67,000 Accounts receivable 139,000 Sales revenue 206,000 January 30 Cost of goods sold 122,500 Inventory 122,500 1,680 500 January 31 Notes payable Interest expense Cash 2,180 a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a service life of 10 years and a residual value of $26,000 b. The company estimates future unconectible accounts. The company determines S5,000 ot accounts receivable on January 31 are past due, and 50% of these accounts are esiimaied to unco ile t ble. The rema ning accounts receivable onJanuary 31 are not past due, and 2% of these accounts are estimated to uncollectible. accounts were written o asun ollect ble in Ja c Unpaid salaries at the end of January are $28,100. d. Accrued income taxes at the end of January are $10,000 2. Record the adjusting entries on January 31 for the above transactions.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Date General Journal Debit Credit 1,567 Accumulated depreciation 1,567 January 31 Salaries expense 28,100 Salaries payable 28,100 4 | January 31 Incom e tax expense 10,000 Income tax payable 10,000 3. Prepare an adjusted trial balance as of January 31, 2018 Freedom Fireworks Adjusted Trial Balance January 31, 2018 Accounts Debit Credit Totals 4. Prepare a multiple-step income statement for the period ended January 31, 2018. Freedom Fireworks Multiple-Step Income Statement For the month ended January 31, 2018 Gross profit Expenses: Total operating expenses 5. Prepare a classified balance sheet as of January 31, 2018. (Hint: The carrying value of notes payable on January 31, 2018 is $118,320; $19,411 is reported as notes payable in the current liabilities section and $98,909 is reported as notes payable in the long-term liabilities section ($19,411 $98,909 $118,320). (Amounts to be deducted should be indicated with a minus sign.) Freedom Fireworks Classified Balance Sheet January 31, 2018 Assets Liabilities Total current liabilities Total liabilities Stockholder's Equity Total current assets Total stockholders' equity Total liabilities and stockholders' equity Total assets