On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Credit Debit $ 59,800 27,200 $ 3,300 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 37,400 25, 200 166,000 15,900 231,000 65,400 $315,600 $315,600 During January 2021, the following transactions occur: January 1 Purchase equipment for $20,600. The company estimates a residual value of $2,600 and a five-year service life. January 4 Pay cash on accounts payable, $10,600. January 8 Purchase additional inventory on account, $93,900. January 15 Receive cash on accounts receivable, $ 23,100. January 19 Pay cash for salaries, $30,900. January 28 Pay cash for January utilities, $17,600. January 30 Sales for January total $231,000. All of these sales are on account. The cost of the units sold is $120,500. Information for adjusting entries: 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 $4,100 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 $33,700. 4. Prepare a multiple-step income statement for the period ended January 31, 2021. TNT FIREWORKS Multiple-Step Income Statement For the month ended January 31, 2021 Expenses Total Operating Expenses On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Credit Debit $ 59,800 27,200 $ 3,300 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 37,400 25, 200 166,000 15,900 231,000 65,400 $315,600 $315,600 During January 2021, the following transactions occur: January 1 Purchase equipment for $20,600. The company estimates a residual value of $2,600 and a five-year service life. January 4 Pay cash on accounts payable, $10,600. January 8 Purchase additional inventory on account, $93,900. January 15 Receive cash on accounts receivable, $ 23,100. January 19 Pay cash for salaries, $30,900. January 28 Pay cash for January utilities, $17,600. January 30 Sales for January total $231,000. All of these sales are on account. The cost of the units sold is $120,500. Information for adjusting entries: 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 $4,100 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 $33,700. 4. Prepare a multiple-step income statement for the period ended January 31, 2021. TNT FIREWORKS Multiple-Step Income Statement For the month ended January 31, 2021 Expenses Total Operating Expenses
