Question
On January 1, 2024, the general ledger of TNT Fireworks includes the following account balances: Accounts Cash Accounts Receivable Debit $ 58,700 25,000 Credit
On January 1, 2024, the general ledger of TNT Fireworks includes the following account balances: Accounts Cash Accounts Receivable Debit $ 58,700 25,000 Credit Allowance for Uncollectible Accounts Inventory $ 2,200 36,300 Notes Receivable (58, due in 2 years) 12,000 Land 155,000 Accounts Payable Common Stock 14,800 220,000 Retained Earnings 50,000 Totals $ 287,000 $287,000 During January 2024, the following transactions occur: January 1 Purchase equipment for $19,500. The company estimates a residual value of $1,500 and a five-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 the units sold is $115,000. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company records an adjusting entry for $5,900 for estimated future uncollectible accounts. c. The company has accrued interest on notes receivable for January d. Unpaid salaries owed to employees at the end of January are $32,600. e. The company accrued income taxes at the end of January of $9,000.
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