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Required information Skip to question [The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of ACME Fireworks includes

Required information

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[The following information applies to the questions displayed below.]

On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances:

Accounts Debit Credit
Cash $ 25,200
Accounts Receivable 46,400
Allowance for Uncollectible Accounts $ 4,300
Inventory 20,100
Land 47,000
Equipment 16,000
Accumulated Depreciation 1,600
Accounts Payable 28,600
Notes Payable (6%, due April 1, 2022) 51,000
Common Stock 36,000
Retained Earnings 33,200
Totals $ 154,700 $ 154,700

During January 2021, the following transactions occur:

January 2 Sold gift cards totaling $8,200. The cards are redeemable for merchandise within one year of the purchase date.
January 6 Purchase additional inventory on account, $148,000.
January 15 Firework sales for the first half of the month total $136,000. All of these sales are on account. The cost of the units sold is $74,300.
January 23 Receive $125,500 from customers on accounts receivable.
January 25 Pay $91,000 to inventory suppliers on accounts payable.
January 28 Write off accounts receivable as uncollectible, $4,900.
January 30 Firework sales for the second half of the month total $144,000. Sales include $10,000 for cash and $134,000 on account. The cost of the units sold is $80,000.
January 31 Pay cash for monthly salaries, $52,100.
  • Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a residual value of $3,400 and a two-year service life.

  • The company estimates future uncollectible accounts. The company determines $12,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)

  • Accrued interest expense on notes payable for January.

  • Accrued income taxes at the end of January are $13,100.

  • By the end of January, $3,100 of the gift cards sold on January 2 have been redeemed.

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.)

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