Prepare a multiple-step income statement for the period ended January 31, 2018 based on the following:

On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances:

Accounts	Debit			Credit
Cash	$	25,900
Accounts Receivable		47,800
Allowance for Uncollectible Accounts				$	5,000
Inventory		20,800
Land		54,000
Equipment		19,000
Accumulated Depreciation					2,300
Accounts Payable					29,300
Notes Payable (6%, due April 1, 2019)					58,000
Common Stock					43,000
Retained Earnings					29,900
Totals	$	167,500		$	167,500

During January 2018, the following transactions occur: January 2. Sold gift cards totaling $9,600. The cards are redeemable for merchandise within one year of the purchase date. January 6. Purchase additional inventory on account, $155,000. January 15. Firework sales for the first half of the month total $143,000. All of these sales are on account. The cost of the units sold is $77,800. January 23. Receive $126,200 from customers on accounts receivable. January 25. Pay $98,000 to inventory suppliers on accounts payable. January 28. Write off accounts receivable as uncollectible, $5,600. January 30. Firework sales for the second half of the month total $151,000. Sales include $14,000 for cash and $137,000 on account. The cost of the units sold is $83,500. January 31. Pay cash for monthly salaries, $52,800.

1. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a residual value of $4,600 and a two-year service life. 2. The company estimates future uncollectible accounts. The company determines $19,000 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.) 3. Accrued interest expense on notes payable for January. 4. Accrued income taxes at the end of January are $13,800. 5. By the end of January, $3,800 of the gift cards sold on January 2 have been redeemed.

Adjusted Trial Balance

January 31, 2018 Accounts Credit Cash $ Debit 24,900 196,000 14,550 Accounts receivable Allowance for uncollectible accounts Inventory Land 14,500 54,000 19,000 Equipment Accumulated depreciation Accounts payable Notes payable Common stock 6,600 104,800 X 58,000 43,000 29,900 Retained earnings Totals $ 308,400 $ 256,850