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 Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Accounts Payable Notes Payable (6%, due in 3 years) Common Stock Retained Earnings Totals Debit Credit $ 22,100 37,000 $ 3,300 31,000 63,100 31,900 31,000 57,000 30,000 $ 153,200 $153,200 The $31,000 beginning balance of inventory consists of 310 units, each costing $100. During January 2021, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,000 units for $106,000 on account ($106 each). January 8 Purchase 1,100 units for $122, 100 on account ($111 each). January 12 Purchase 1,200 units for $139,200 on account ($116 each). January 15 Return 105 of the units purchased on January 12 because of defects. January 19 Sell 3,400 units on account for $544,000. The cost of the units sold is determined using a PIFO perpetual inventory system. January 22 Receive $489,000 from customers on accounts receivable. January 24 Pay $319,000 to inventory suppliers on accounts payable. January 27 Write oft accounts receivable as uncollectible, $2,600. January 31 Pay cash for salaries during January, $115,000. The following information is available on January 31, 2021. 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 $4,100 of accounts receivable on January 31 are past due, and 45% 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.) 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 $12,400. Exercise 6-21 Part 6 6. Record closing entries. (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 1 2 Record the closing entry for revenue accounts. Note: Enter debits before credits General Journal Debit Credit Date January 31, 2021 Record entry Clear entry View general journal
