Question
Required information Exercise 7-21B Complete the accounting cycle using long-term asset transactions (LO7-4, 7-7) Skip to question: Exercise 7-21B Part 1 1. Record each of
Required information
Exercise 7-21B Complete the accounting cycle using long-term asset transactions (LO7-4, 7-7)
Skip to question:
Exercise 7-21B Part 1
1. Record each of the transactions listed above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
[The following information applies to the questions displayed below.] On January 1, Year 1, the general ledger of a company includes the following account balances:
Accounts | Debit | Credit | |||||
Cash | $ | 59,100 | |||||
Accounts Receivable | 25,800 | ||||||
Allowance for Uncollectible Accounts | $ | 2,600 | |||||
Inventory | 36,700 | ||||||
Notes Receivable (5%, due in 2 years) | 16,800 | ||||||
Land | 159,000 | ||||||
Accounts Payable | 15,200 | ||||||
Common Stock | 224,000 | ||||||
Retained Earnings | 55,600 | ||||||
Totals | $ | 297,400 | $ | 297,400 | |||
During January Year 1, the following transactions occur:
January | 1 | Purchase equipment for $19,900. The company estimates a residual value of $1,900 and a five-year service life. | ||
January | 4 | Pay cash on accounts payable, $9,900. | ||
January | 8 | Purchase additional inventory on account, $86,900. | ||
January | 15 | Receive cash on accounts receivable, $22,400. | ||
January | 19 | Pay cash for salaries, $30,200. | ||
January | 28 | Pay cash for January utilities, $16,900. | ||
January | 30 | Sales for January total $224,000. All of these sales are on account. The cost of the units sold is $117,000. |
Information for adjusting entries:
- Depreciation on the equipment for the month of January is calculated using the straight-line method.
- The company estimates future uncollectible accounts. The company determines $3,400 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.)
- Accrued interest revenue on notes receivable for January.
- Unpaid salaries at the end of January are $33,000.
- Accrued income taxes at the end of January are $9,400.
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Exercise 7-21B Part 1
1. Record each of the transactions listed above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
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