Required information Exercise 7-21B 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, Year 1, the general ledger of a company includes the following account balances: Credit Debit $ 60,400 28,400 $ 3,900 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 38,000 32,400 172,000 16,500 237,000 73,800 $331,200 $331,200 During January Year 1, the following transactions occur: January 1 Purchase equipment for $21,200. The company estimates a residual value of $3,200 and a four-year service life. January 4 Pay cash on accounts payable, $11,200. January 8 Purchase additional inventory on account, $99,900. January 15 Receive cash on accounts receivable, $23,700. January 19 Pay cash for salaries, $31,500. January 28 Pay cash for January utilities, $18, 200. January 30 Sales for January total $237,000. All of these sales are on account. The cost of the units sold is $123,500. 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 $4,700 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 $34,300. e. Accrued income taxes at the end of January are $10,700. 5. Prepare a classified balance sheet as of January 31, Year 1. (Deductible amounts should be indicated with a minus sign.) Balance Sheet January 31, Year 1 Assets Liabilities $ Cash Accounts Receivable Less: Allowance Inventory 2,000 Accounts Payable 241,700 Income Tax Payable 14,400 10,700 10,700 Total Current Assets Land Equipment Total Current Liabilities 258,100 Stockholder's Equity 172,000 Common Stock 21,200 Retained Earnings 237,000 73,800 | Total Stockholders' Equity Total Liabilities and Stockholders' Equity 310,800 $ 321,500 Total Assets | $ 451,300