! Required information (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 Credit Cash Debit $ 60, 700 29,000 $ 4,200 Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 38,300 36,000 175,000 16,800 240,000 78,000 $339,000 $339,000 During January 2021, the following transactions occur: January 1 Purchase equipment for $21,500. The company estimates a residual value of $3,500 and a five-year service life. January 4 Pay cash on accounts payable, $11,500. January 8 Purchase additional inventory on account, $102,900. January 15 Receive cash on accounts receivable, $24,000. January 19 Pay cash for salaries, $31,800. January 28 Pay cash for January utilities, $18,500. January 30 Sales for January total $240,000. All of these sales are on account. The cost of the units sold is $125,000. 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 $5,000 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 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 $34,600. e. Accrued income taxes at the end of January are $11,000. Journal entry worksheet Purchase equipment for $21,500, cash. The company estimates a residual value of $3,500 and a five-year service life. Note: Enter debits before credits. Date General Journal Debit Credit January 01 Depreciation Expense 21,500 Record entry Clear entry View general journal