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: Accounts Cash Accounts Receivable Allowance for Uncollectible Debit $ 59,500 Credit 26,600 $ 3,000 Accounts Inventory 37,100 Notes Receivable (5%, due in 21,600 2 years) Land 163,000 Accounts Payable 15,600 Common Stock 228,000 Retained Earnings 61,200 Totals $307,800 $307,800 During January 2021, the following transactions occur: January 1 Purchase equipment for $20,300. The company estimates a residual value of $2,300 and a five-year service life. January 4 Pay cash on accounts payable, $10,300. January 8 Purchase additional inventory on account, $90,900. January 15 Receive cash on accounts receivable, $22,800. January 19 Pay cash for salaries, $30,600. January 28 Pay cash for January utilities, $17,300. January 30 Sales for January total $228,000. All of these sales are on account. The cost of the units sold is $119,000. 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 $3,800 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 2% 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 $33,400. e. Accrued income taxes at the end of January are $9,800. Exercise 7-21 Part 2 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select particular "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 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. Date General Journal Debit Credit January 31 Depreciation Expense Accumulated Depreciation Record entry Clear entry View general journal Exercise 7-21 Part 3 3. Prepare an adjusted trial balance as of January 31, 2021. TNT FIREWORKS Adjusted Trial Balance Accounts Totals January 31, 2021 Debit Credit