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 Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Accounts Payable Notes Payable (6%, due in 3 years) Common Stock Retained Earnings Totals Debit Credit $ 22,700 38,500 $ 3,900 34,000 67,600 30,400 34,000 60,000 34,500 $162,800 $162,800 The $34,000 beginning balance of inventory consists of 340 units, each costing $100. During January 2021, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,300 units for $141,700 on account ($109 each). January 8 Purchase 1,400 units for $159,600 on account ($114 each). January 12 Purchase 1,500 units for $178,500 on account ($119 each). January 15 Return 120 of the units purchased on January 12 because of defects. January 19 Sell 4,300 units on account for $645,000. The cost of the units sold is determined using a FIFO perpetual inventory system. January 22 Receive $621,000 from customers on accounts receivable. January 24 Pay $451,000 to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $2,900. January 31 Pay cash for salaries during January, $118,000. 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 $4,400 of accounts receivable on January 31 are past due, and 35% 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 $12,700. 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 $4,400 of accounts receivable on January 31 are past due, and 35% 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 $12,700. 2. Record adjusting entries on January 31 for the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Date January 31 Answer is complete but not entirely correct. General Journal Debit Costs of goods sold 7,980X Credit Inventory 7,980 X 3,300 January 31 Bad debt expense Allowance for uncollectible accounts 3,300 January 31 170 Interest expense Interest payable 170 January 31 12,700 Income tax expense Income tax payable 12,700 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, $4,400 of accounts receivable are past due, and the company estimates that 35% 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 $12,700. 3. Prepare an adjusted trial balance as of January 31, 2021. X Answer is complete but not entirely correct. BIG BLAST FIREWORKS Adjusted Trial Balance January 31, 2021 Accounts Debit Credit Cash $ 74,7001 Accounts receivable 59,600 Allowance for uncollectible 4,300 accounts Inventory 42,000x Land 67,600 Accounts payable 44,920 Interest payable 1707 Income tax payable 12,700 Notes payable 34,000 Common stock 60,000 Retained earnings 34,500 Sales revenue 645,000 Cost of goods sold 449,540) Salaries expense 118,000 Bad debt expense 3,300 Interest expense 1707 Income tax expense 12,700 Totals 827,610 835,590 4. Prepare a multiple-step income statement for the period ended January 31, 2021. X Answer is not complete. BIG BLAST FIREWORKS Multiple-step Income Statement For the year ended January 31, 2021 Sales revenue 645,000 Cost of goods sold 0 Total operating expenses Operating income (loss) Interest expense 170) Income before taxes Income tax expense Net income ssss 12,700X 134,179% $ 87,810X 5. Prepare a classified balance sheet as of January 31, 2021. (Amounts to be deducted should be indicated with a minus sign.) oneet Assets X Answer is not complete. BIG BLAST FIREWORKS Classified Balance Sheet January 31, 2021 Liabilities 74.700 Accounts payable Interest payable Income tax payable $ Cash 44,920 170 12,700 Inventory 0 74,700 Total current assets Total current liabilities 57,790 57,790 Total liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity Total assets 174,700 57.790 6. Record closing entries. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) 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