Question
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
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:
Accounts | Debit | Credit | ||||||
Cash | $ | 26,600 | ||||||
Accounts Receivable | 49,200 | |||||||
Allowance for Uncollectible Accounts | $ | 5,700 | ||||||
Inventory | 21,500 | |||||||
Land | 61,000 | |||||||
Equipment | 22,500 | |||||||
Accumulated Depreciation | 3,000 | |||||||
Accounts Payable | 30,000 | |||||||
Notes Payable (6%, due April 1, 2022) | 65,000 | |||||||
Common Stock | 50,000 | |||||||
Retained Earnings | 27,100 | |||||||
Totals | $ | 180,800 | $ | 180,800 | ||||
During January 2021, the following transactions occur:
January | 2 | Sold gift cards totaling $11,000. The cards are redeemable for merchandise within one year of the purchase date. | ||
January | 6 | Purchase additional inventory on account, $162,000. | ||
January | 15 | Firework sales for the first half of the month total $150,000. All of these sales are on account. The cost of the units sold is $81,300. | ||
January | 23 | Receive $126,900 from customers on accounts receivable. | ||
January | 25 | Pay $105,000 to inventory suppliers on accounts payable. | ||
January | 28 | Write off accounts receivable as uncollectible, $6,300. | ||
January | 30 | Firework sales for the second half of the month total $158,000. Sales include $14,000 for cash and $144,000 on account. The cost of the units sold is $87,000. | ||
January | 31 | Pay cash for monthly salaries, $53,500. |
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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 $4,500 and a two-year service life.
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The company estimates future uncollectible accounts. The company determines $26,000 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.)
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Accrued interest expense on notes payable for January.
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Accrued income taxes at the end of January are $14,500.
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By the end of January, $4,500 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.)
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.) View transaction list View journal entry worksheet No Date Debit Credit January 31 General Journal Depreciation Expense Accumulated Depreciation January 31 Bad Debt Expense Allowance for Uncollectible Accounts January 31 Interest Expense Interest Payable 4 January 31 14,500 Income Tax Expense Income Tax Payable 14,500 January 31 4,500 Deferred Revenue Sales Revenue 4,500
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