Required Information Exercise 7-21 Complete the accounting cycle using long-term asset transactions (L074,7.7) [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 Debit Credit Cash $ 58,700 Accounts Receivable 25,000 Allowance for Uncollectible $ 2,200 Accounts Inventory 36,300 Notes Receivable (53, due in 2 years) 12,000 Land 155,000 Accounts Payable 14,800 Common Stock 220,000 Retained Earnings 50,000 Totals $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, $82,90). January 15 Receive cash on accounts receivable, $22,000. 1 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. Exercise 7-21 Part 6 6. Record closing entries. (If no entry is required for a particular transaction/event, afect "No Journaler Required" in the first account field.) View transaction list Journal entry worksheet 1 2 Record the closing entry for revenues. Note: Enter debits before credits. General Journal Debit Credit Date January 31 2021 Record entry View general journal Clear entry Exercise 7-21 Part 6 6. Record closing entries. (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