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

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

Accounts Debit Credit

Cash $58,700

Accounts Receivable $25,000

Allowance for Uncollectible Accounts $2,200

Inventory $36,300

Notes Receivable (5%, due in 2 years) $12,000

Land $155,000

Accounts Payable $14,800

Common Stock $220,000

Retained Earnings $50,000

Totals $287,000 $287,000

January 1 Purchase equipment for $19,500. The company estimates a residual value of $1,500 and a 5 year service life.

January 4 Pay cash on accounts payable, $9,500.

January 8 Purchase additional inventory on account, $82,900.

January 15 Receive cash on accounts receivable, $22,000.

January 19 Pay cash for salaries, $29,800.

January 28 Pay cash for January utilities, $16,500.

January 30 Firework sales for January total $220,000. All of these sales are on account. The cost of units sold is $115,000.

a. Depreciation on the equipment for the month of January is calculated using the straight-line method.

b. The company estimates future uncollectible accounts. The company determines $3,000 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 3% of these accounts are estimated to be uncollectible. (Hint, use the January 31 accounts receivable balance calculated in the general ledger.)

c. Accrued Interest revenue on notes receivable for January.

d. Unpaid salaries at the end of January are $32,600.

e. Accrued income taxes at the end of January are $9,000.