Pharoah Company's balance sheet at December 31, 2021, is presented below. Pharoah Company Balance Sheet December 31, 2021 Cash $14,320 Accounts payable Accounts receivable 20,200 Common stock Allowance for doubtful accounts (870) Retained earnings Inventory 9,560 $43,210 $9,090 18.100 16,020 $43,210 During January 2022, the following transactions occurred. Pharoah uses the perpetual inventory method. Jan. 1 3 8 11 15 Pharoah accepted a 4-month, 8% note from Betheny Company in payment of Betheny's $4,800 account. Pharoah wrote off as uncollectible the accounts of Walter Corporation ($400) and Drake Company ($300). Pharoah purchased $15,560 of inventory on account Pharoah sold for $27,300 on account inventory that cost $17.070. Pharoah sold inventory that cost $770 to Jack Rice for $1,100. Rice charged this amount on his Visa First Bank card. service fee charged Pharoah by First Bank is 3% Pharoah collected $21.200 from customers on account Pharoah paid $16,070 on accounts payable. Pharoah received payment in full ($300) from Drake Company on the account written off on January 3. Pharoah purchased advertising supplies for $1.430 cash. Pharoah paid other operating expenses, $3,070. 17 21 24 27 31 17 21 service fee charged Pharoah by First Bank is 3%. Pharoah collected $21,200 from customers on account. Pharoah paid $16,070 on accounts payable. Pharoah received payment in full ($300) from Drake Company on the account written off on January 3. Pharoah purchased advertising supplies for $1,430 cash. Pharoah paid other operating expenses, $3,070. 24 27 31 Adjustment data: 1. 2. 3. 4. Interest is recorded for the month on the note from January 1. Bad debts are expected to be 6% of the January 31, 2022, accounts receivable. A count of advertising supplies on January 31, 2022, reveals that $520 remains unused. The income tax rate is 30%. (Hint: Prepare the income statement up to Income before taxes and multiply by 30% to compute the amount; round to whole dollars.) (You may want to set up T-accounts to determine ending balances.) Your answer is partially correct. Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual inventory system.) (Round answers to decimal places, eg: 1,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Debit Credit Account Titles and Explanation Notes Receivable Jan. 4800 Accounts Receivable Jan 3 Allowance for Doubtful Accounts Accounts Receivable Jan 8 Inventory Accounts Payable Jan 11 v Accounts Receivable Sales Revenue (To record sales revenues.) Cost of Goods Sold Jan 11 Inventory (To record cost of goods sold) Casti Jan 15 Other Operating Expenses Sales Revenue (To record sales revenues and service charges.) Jan 15 Cost of Goods Sold Inventory (To record cost of goods sold. Cash Jan, 17 v Accounts Receivable Jan 21 Accounts Payable Cash Jan. 24 Accounts Receivable 300 Allowance for Doubtful Accounts (To reverse allowance for doubtfuldebts.) Cash Jan 24 Accounts Receivable (To record cash received from Drake Company) Other Operating Expenses Jan 27 ton, 31 v Other Operating Expenses Cash Cash 32 Jan. 31 (1) Interest Receivable Interest Revenue (2) Bad Debts Expense Allowance for Doubtful Accounts (3) Supplies Supplies Expense (4) Income Tax Expense Income Taxes Payable Taythank and Media PHAROAH COMPANY Adjusted Trial Balance Debit Credit $ Prepare an income statement for the month ending January 31, 2022. (Round answers to O decimal places, eg. 1,250.) PHAROAH COMPANY Income Statement $ In Prepare a retained earnings statement for the month ending January 31, 2022. (Round answers to decimal places, eg. 1,250.) PHAROAH COMPANY Retained Earnings Statement eTextbook and Media List of Accounts 0.87/6 Question 2 of 2 PHAROAH COMPANY Balance Sheet Assets Labilities and Stockholders' Equity
