Question
On January 1, year 1, the general ledger of a company includes the following account balances: Accounts Debit Credit cash $59,000 accounts receivable $25,600 allowance
On January 1, year 1, the general ledger of a company includes the following account balances:
Accounts | Debit | Credit |
cash | $59,000 | |
accounts receivable | $25,600 | |
allowance for uncollectible accounts | 2,500 | |
inventory | 36,600 | |
notes receivable (5%, due in 2 years) | 15,600 | |
land | 158,000 | |
Accounts payable | 15,100 | |
common stock | 223,000 | |
retained earnings | 54,200 | |
Totals | 294,800 | 294,800 |
During January Year 1, the following transactions occur:
January 1 | Purchase equipment for $19,800. The company estimates a residual value of $1,800 and a six-year service life. |
January 4 | Pay cash on account payable, $9,800 |
January 8 | Purchase additional inventory on account, $85,900. |
January 15 | Receive cash on accounts receivable, $22,300. |
January 19 | Pay cash for salaries, $30,100 |
January 28 | Pay cash for January utilities, $16,800 |
January 30 | Sales for January total $223,00. All of these sales are on account. The cost of the units sold is $116,500. |
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 $3,300 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 2% 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 $32,900.
e. Accrued income taxes at the end of January are $9,300.
Prepare an adjusted Trial Balance as of January 31, Year 1.
Exercise 1-21B Part 3 3. Prepare an adjusted trial balance as of January 31, Year 1. Adjusted Trial Balance January 31, Year 1 Accounts Debit Credit -S Totals $ 0 $ 0Step by Step Solution
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