On January 1, Year 1, the general ledger of a company Includes the following account balances: Credit Debit $ 59, eee 25,600 $ 2,500 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 36,680 15,600 158,000 15,180 223,000 54,200 $ 294,800 $ 294,880 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 accounts payable, $9,800. January 8 Purchase additional inventory on account, $85,988. 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 $223,600. 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 $ 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 recelvable 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. Unpald salaries at the end of January are $32,900. e. Accrued income taxes at the end of January are $9,300. Exercise 7-21B Part 2 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select particular "No Journal Entry Required" In the first account fleld.) View transaction list Journal entry worksheet 1 2 3 > Depreciation on the equipment for the month of January is calculated using the straight-line method. Record the adjusting entry for depreciation. Note: Enter debits before credits. C. Accrueu interest revenue on roles receivable lor January. d. Unpald salaries at the end of January are $32,900. e. Accrued Income taxes at the end of January are $9,300. Exercise 7-21B Part 2 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select particular "No Journal Entry Required" In the first account field.) View transaction list View journal entry worksheet No Date Debit Credit 1 January 31 General Journal Depreciation Expense Accumulated Depreciation 250 250 2 January 31 Bad Debt Expense Allowance for Uncollectible Accounts 3 January 31 Interest Receivable Interest Revenue 4 January 31 Salaries Expense Salaries Payable 5 January 31 Income Tax Expense Income Tax Payable Required information Debit Credit Adjusted Trial Balance January 31, Year 1 Accounts Cash Interest Receivable Accounts Receivable Allowance for Uncollectible Accounts Inventory Note Receivable Land Equipment Accumulated Depreciation Accounts Payable Salaries Payable Income Tax Payable Common Stock Retained Earnings Interest Revenue Sales Revenue Cost of Goods Sold Depreciation Expense Bad Debt Expense Salaries Expense Utilities Expense Income Tax Expense Totals S S 0 Exercise 7-21B Part 4 4. Prepare a multiple-step Income statement for the period ended January 31, Year 1. Multiple-Step Income Statement For the month ended January 31, Year 1 Sales Revenue Cost of Goods Sold Gross Profit s 0 Expenses Depreciation Expense Bad Debt Expense Salaries Expense Utilities Expense 0 0 Total Operating Expenses Operating Income Interest Revenue Income before taxes Income Tax Expense Net Income 0 s 0 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 Cash Interest Receivable Less: Allowance Accounts Receivable Inventory Accounts Payable Salaries Payable Income Tax Payable 0 Total Current Assets Notes Receivable Land Equipment Total Current Liabilities Stockholder's Equity Common Stock Retained Earnings 0 Total Stockholders' Equity Total Liabilities and Stockholders' Equity Total Assets $ View transaction list Journal entry worksheet