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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 a classified balance sheet as of January 31, Year 1 (Deductible amounts should be indicated with a minus sign.)

image text in transcribed

Exercise 7-21B Part 5 5. Prepare a classified balance sheet as of January 31, Year 1. (Deductible amounts should be indicated with a minus sign.) Balance Sheet January 31, Year 1 Assets Liabilities 0 Total Current Liabilities Stockholder's Equity Total Current Assets 0 0 Total Stockholders' Equity Total Liabilities and Stockholders' Equity Total Assets $ 0 $ 0

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