Required information [The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: During January 2021 , the following transactions occur: January 2 Sold gift cards totaling $8,800. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $151,000. January 15 Firework sales for the first half of the month total $139,000. All of these sales are on account. The cost of the units sold is $75,800. January 23 Receive $125,800 from customers on accounts receivable. January 25 Pay $94,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $5,200. January 30 Firework sales for the second half of the month total $147,000. Sales include $12,000 for cash and $135,000 on account. The cost of the units sold is $81,500. January 31 Pay cash for monthly salaries, $52,400. - 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 $3,800 and a two-year service life. - The company estimates future uncollectible accounts. The company determines $15,000 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 3% 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 $13,400. - By the end of January, $3,400 of the gift cards sold on January 2 have been redeemed. Required information [The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: During January 2021 , the following transactions occur: January 2 Sold gift cards totaling $8,800. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $151,000. January 15 Firework sales for the first half of the month total $139,000. All of these sales are on account. The cost of the units sold is $75,800. January 23 Receive $125,800 from customers on accounts receivable. January 25 Pay $94,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $5,200. January 30 Firework sales for the second half of the month total $147,000. Sales include $12,000 for cash and $135,000 on account. The cost of the units sold is $81,500. January 31 Pay cash for monthly salaries, $52,400. - 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 $3,800 and a two-year service life. - The company estimates future uncollectible accounts. The company determines $15,000 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 3% 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 $13,400. - By the end of January, $3,400 of the gift cards sold on January 2 have been redeemed
