Required Information [The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Debit Credit Cash $ 23,5ee Accounts Receivable 40,500 Allowance for Uncollectible Accounts $ 4,700 Inventory 38, Bee Land 73,600 Accounts Payable 28,400 Notes Payable (9%, due in 3 years) 38,eee Common Stock 64,000 Retained Earnings 40,500 Totals $175,600 $175,600 The $38.000 beginning balance of inventory consists of 380 units, each costing $100. During January 2021. Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,700 units for $180,200 on account ($106 each). January 8 Purchase 1,880 units for $199,880 on account ($111 each). January 12 Purchase 1,980 units for $220,400 on account ($116 each). January 15 Return 140 of the units purchased on January 12 because of defects. January 19 Sell 5,500 units on account for $825,898. The cost of the units sold is determined using a FIFO perpetual inventory system. January 22 Receive $797,980 from customers on accounts receivable. January 24 Pay $580,Bee to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $3,300. January 31 Pay cash for salaries during January, $122,680. The following information is available on January 31, 2021. a. At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $100 each. b. The company estimates future uncollectible accounts. The company determines $4.800 of accounts receivable on January 31 are past due, and 40% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest expense on notes payable for January. Interest is expected to be paid each December 31. d. Accrued income taxes at the end of January are $13,100. a. At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $100 each. b. At the end of January. $4.800 of accounts receivable are past due, and the company estimates that 40% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 5% will not be collected. c. Accrued interest expense on notes payable for January. Interest is expected to be paid each December 31. d. Accrued income taxes at the end of January are $13,100. 3. Prepare an adjusted trial balance as of January 31, 2021. BIG BLAST FIREWORKS Adjusted Trial Balance January 31, 2021 Debit Accounts Credit MIN Totals $ 0 $ 0 4. Prepare a multiple-step income statement for the period ended January 31, 2021. BIG BLAST FIREWORKS Multiple-step Income Statement For the year ended January 31, 2021 0 Total operating expenses Operating income (loss) 5. Prepare a classified balance sheet as of January 31, 2021. (Amounts to be deducted should be Indicated with a minus slgn.) BIG BLAST FIREWORKS Classified Balance Sheet January 31, 2021 Assets Liabilities Cash Accounts receivable $ 118,500 Accounts payable 65,200 Interest payable 8,500 Income tax payable $ 26,180 285 13.100 Inventory Less: Allowance (4.940) Total current assets (4.940) 187,260 Total current liabilities 73,600 Notes payable 39,585 Land 38,000 77,585 Total liabilities Stockholders' Equity Common stock Retained earnings 84,000 119,295 Total stockholders' equity Total liabilities and stockholders' equity 183,295 $ 280,880 Total assets $ 260,860 6. Record closing entries. (If no entry is required for a transaction/event, select "No journal entry requlred" In the first account field.) View transaction list Journal entry worksheet Record the closing entry for revenue accounts. Note: Enter debits before credits. Date General Journal Debit Credit January 31. 2021 Record entry Clear entry View general journal 8. Record closing entries. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.) View transaction list Journal entry worksheet Record the closing entry for expense accounts. Note: Enter debits before credits. Date General Journal Debit Credit January 31. 2021 Record entry Clear entry View general journal
