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

Accounts	Debit				Credit
Cash	$	12,700
Accounts Receivable		37,000
Inventory		153,500
Land		82,300
Buildings		135,000
Allowance for Uncollectible Accounts					$	3,300
Accumulated Depreciation						11,100
Accounts Payable						34,200
Common Stock						215,000
Retained Earnings						156,900
Totals	$	420,500			$	420,500

During January 2021, the following transactions occur:

January 1		Borrow $115,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $2,223 are required at the end of each month for 60 months.
January 4		Receive $32,500 from customers on accounts receivable.
January 10		Pay cash on accounts payable, $26,000.
January 15		Pay cash for salaries, $30,400.
January 30		Firework sales for the month total $210,000. Sales include $66,500 for cash and $143,500 on account. The cost of the units sold is $120,000.
January 31		Pay the first monthly installment of $2,223 related to the $115,000 borrowed on January 1. Round your interest calculation to the nearest dollar.

The following information is available on January 31, 2021.

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 $27,000.
2. The company estimates future uncollectible accounts. The company determines $4,500 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 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
3. Unpaid salaries at the end of January are $27,600.
4. Accrued income taxes at the end of January are $9,500.
5. $20,434 of the long-term note payable balance will be paid over the next year.

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 8-12).

3.		Review the adjusted 'Trial Balance' as of January 31, 2021, in the 'Trial Balance' tab.
4.		Prepare a multiple-step income statement for the period ended January 31, 2021, in the 'Income Statement' tab.
5.		Prepare a classified balance sheet as of January 31, 2021, in the 'Balance Sheet' tab.
6.		Record the closing entries in the 'General Journal' tab (these are shown as items 13 and 14).
7.		Using the information from the requirements above, complete the 'Analysis' tab.