On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances Accounts Debit Credit Cash $ 27,100 Accounts Receivable 50,200 Allowance for Uncollectible Accounts $ 6,200 Inventory 22,000 Land 66,000 Equipment 25,000 Accumulated Depreciation 3,500 Accounts Payable 30,500 Notes Payable (6 , due April 1, 2022) 70,000 Common Stock 55,000 Retained Earnings 25,100 Totals $ 190,300 $ 190,300 During January 2021, the following transactions occur January 2 Sold gift cards totaling $12,000 The cards are redeemable for merchandise within one year of the purchase date January 6 Purchase additional inventory on account, $167,000 January 15 Firework sales for the first half of the month total $155,000 All of these sales are on account The cost of the units sold is $83,800 January 23 Receive $127,400 from customers on accounts receivable January 25 Pay $110,000 to inventory suppliers on accounts payable January 28 Write off accounts receivable as uncollectible, $6,800 January 30 Firework sales for the second half of the month total $163,000 Sales include $17,000 for cash and $146,000 on account The cost of the units sold is $89,500 January 31 Pay cash for monthly salaries, $54,000 The following information is available on January 31 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 $5,200 and a two year service life The company estimates future uncollectible accounts The company determines $31,000 of accounts receivable on January 31 are past due, and 30 of these accounts are estimated to be uncollectible The remaining accounts receivable on January 31 are not past due, and 4 of these accounts are estimated to be uncollectible (Hint Use the January 31 accounts receivable balance calculated in the general ledger ) Accrued interest expense on notes payable for January Accrued income taxes at the end of January are $15,000 By the end of January, $5,000 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold)

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Posted on Jul 18, 2024

On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances:

Accounts	Debit		Credit
Cash	$	27,100
Accounts Receivable		50,200
Allowance for Uncollectible Accounts			$	6,200
Inventory		22,000
Land		66,000
Equipment		25,000
Accumulated Depreciation				3,500
Accounts Payable				30,500
Notes Payable (6%, due April 1, 2022)				70,000
Common Stock				55,000
Retained Earnings				25,100
Totals	$	190,300	$	190,300

During January 2021, the following transactions occur:

January	2	Sold gift cards totaling $12,000. The cards are redeemable for merchandise within one year of the purchase date.
January	6	Purchase additional inventory on account, $167,000.
January	15	Firework sales for the first half of the month total $155,000. All of these sales are on account. The cost of the units sold is $83,800.
January	23	Receive $127,400 from customers on accounts receivable.
January	25	Pay $110,000 to inventory suppliers on accounts payable.
January	28	Write off accounts receivable as uncollectible, $6,800.
January	30	Firework sales for the second half of the month total $163,000. Sales include $17,000 for cash and $146,000 on account. The cost of the units sold is $89,500.
January	31	Pay cash for monthly salaries, $54,000.

The following information is available on January 31.

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 $5,200 and a two-year service life.
The company estimates future uncollectible accounts. The company determines $31,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
Accrued interest expense on notes payable for January.
Accrued income taxes at the end of January are $15,000.
By the end of January, $5,000 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold).