Required information Exercise 7-21 Complete the accounting cycle using long-term asset transactions (LO7-4, 7-7) [The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Credit Debit $ 58,700 25,000 $ 2,200 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 36,300 12,000 155,000 14,800 220,000 50,000 $287,000 $287,000 During January 2021, the following transactions occur: January 1 Purchase equipment for $19,500. The company estimates a residual value of $1,500 and a five-year service life. January 4 Pay cash on accounts payable, $9,500. January 8 Purchase additional inventory on account, $82,900. January 15 Receive cash on accounts receivable, $ 22,000. January 19 Pay cash for salaries, $29,800. January 28 Pay cash for January utilities, $16,500. January 30 Firework sales for January total $220,000. All of these sales are on account. The cost of the units sold is $115,000. 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 $3.000 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 3% 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. Unpaid salaries at the end of January are $32,600. e. Accrued income taxes at the end of January are $9,000. 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 2 3 4 5 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. Debit Credit Date January 31 General Journal Depreciation Expense Accumulated Depreciation This is a numeric cell, so please enter numbers only. Record entry Clear entry View general journal