Required information Exercise 6-21 Complete the accounting cycle using inventory transactions (L06-2, 6-3, 6-5, 6-6, 6-7) [The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Debit Credit Cash $ 25,500 Accounts Receivable 45,500 Allowance for Uncollectible Accounts $ 3,900 Inventory 48,000 Land 88,600 Accounts Payable 26,200 Notes Payable (84, due in 3 years) 74,000 Retained Earnings 55,500 Totals $207,600 $207,600 48,000 Common Stock The $48,000 beginning balance of inventory consists of 480 units, each costing $100. During January 2021, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,650 units for $183,150 on account ($111 each). January 8 Purchase 1,750 units for $203,000 on account ($116 each). January 12 Purchase 1,850 units for $223,850 on account ($121 each). January 15 Return 190 of the units purchased on January 12 because of defects. January 19 sell 5,400 units on account for $810,000. The cost of the units sold to determined using a PIPO perpetual inventory system. January 22 Receive $793,000 from customers on accounts receivable. January 24 Pay $580,000 to inventory suppliers on accounts payable. January 27 write oft accounts receivable, as uncollectible, $2,700. January 31 Pay cash for salaries during January, $137,000. The following information is available on January 31, 2021. a. At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $100 each b. The company estimates future uncollectible accounts. The company determines $5,800 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 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest expense on notes payable for January. Interest is expected to be paid each December 31 d. Accrued income taxes at the end of January are $14,100. Exercise 6-21 Part 2 a. At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $100 each b. The company estimates future uncollectible accounts. The company determines $5,800 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 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) C. Accrued interest expense on notes payable for January. Interest is expected to be paid each December 31. d. Accrued income taxes at the end of January are $14,100. 2. Record adjusting entries on January 31 for the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 3 4 2 At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $100 each. Record the adjustment for net realizable value. Note: Enter debits before credits. General Journal Debit Credit Date January 31 Record entry Clear entry View general Journal View transaction list Journal entry worksheet 1 2 3 4 The company estimates future uncollectible accounts. The company determines $5,800 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 4% of these accounts Note: Enter debits before credits. Date General Journal Debit Credit January 31 Record entry Clear entry View general Journal View transaction list Journal entry worksheet