Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On January 1, Year 1, the general ledger of a company includes the following account balances: Accounts Debit Credit Cash $ 24,300 Accounts Receivable 42,500
On January 1, Year 1, the general ledger of a company includes the following account balances:
Accounts | Debit | Credit | ||||
Cash | $ | 24,300 | ||||
Accounts Receivable | 42,500 | |||||
Allowance for Uncollectible Accounts | $ | 2,700 | ||||
Inventory | 42,000 | |||||
Land | 79,600 | |||||
Accounts Payable | 29,200 | |||||
Notes Payable (8%, due in 3 years) | 42,000 | |||||
Common Stock | 68,000 | |||||
Retained Earnings | 46,500 | |||||
Totals | $ | 188,400 | $ | 188,400 | ||
The $42,000 beginning balance of inventory consists of 420 units, each costing $100. During January Year 1, the company had the following inventory transactions:
January | 3 | Purchase 1,050 units for $115,500 on account ($110 each). | ||
January | 8 | Purchase 1,150 units for $132,250 on account ($115 each). | ||
January | 12 | Purchase 1,250 units for $150,000 on account ($120 each). | ||
January | 15 | Return 160 of the units purchased on January 12 because of defects. | ||
January | 19 | Sell 3,600 units on account for $576,000. The cost of the units sold is determined using a FIFO perpetual inventory system. | ||
January | 22 | Receive $529,000 from customers on accounts receivable. | ||
January | 24 | Pay $359,000 to inventory suppliers on accounts payable. | ||
January | 27 | Write off accounts receivable as uncollectible, $2,100. | ||
January | 31 | Pay cash for salaries during January, $110,000. |
The following information is available on January 31, Year 1.
- At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $100 each.
- The company estimates future uncollectible accounts. The company determines $5,200 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
- Accrued interest expense on notes payable for January. Interest is expected to be paid each December 31.
- Accrued income taxes at the end of January are $13,500.
Exercise 6-21B Part 5
5. Prepare a classified balance sheet as of January 31, Year 1. (Amounts to be deducted should be indicated with a minus sign.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started