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 a classified balance sheet as of January 31, Year 1 (Deductible amounts should be indicated with a minus sign.)
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 $ 0Step by Step Solution
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