tember $31$ :

ash

acounts Recelvable

$110$ ance for Doubtful Accounts

iventary

$529,83$e

$12,64$ e

$93e$

ferred Revence $(40$ units$)2,600$

counts Payable $1,460$

utes Payable $($long$-$Lerin$)24,$eee

mnon Stock $7,60$e

etained Iarnings $5,330$

adit balance.

following information is relevant to the first month of operations in the following year:

TP will sell invertory at $$130$ per unlt: OTP's January $1$ Inventory balance consists of $50$ units at a total cost of $$2,000.$ OTP's policy

to use the FIFO method, recorded using a perpetual Irventory system.

$1$ December, OTP recelved a $$5,200$ payment for $40$ units OTP is to delver in January; this obligation was recorded in Deferred

evenue. Rent of $$1,160$ was unpald and recorded in Accounts Payable at December $31.$

TP$\text{'}$s notes payable mature in three years, and accrue Interest at a $10\%$ annual rate.

uary Transactions

ncluded in OTP's January $1$ Accounts Recelvable balance $15$ a $$2\mathrm{.}400$ balance due from Jeff Letrotskl. Jeff Is having cash flow

roblems and cannot pay the $$2400$ balance at thls time. On On$/$O$1,$ OTP arranges with Jeff to convert the $$2400$ balance to a slx$-$

nonth note, at $10\%$ annual interest. Jeff signs the promissory note, which indicates the principal and all interest will be due and

ayable to OTP on July $1$ of this year.

TP paid a $$430$ insurance premlum on $01\mathrm{.}02$ covering the month of January; the payment is recorded directly as an expense.

TP purchased an additlonal $200$ unlts of inventory from a supplier on account on $\frac{01}{05}$ at a total cost of $$8,000.$ with terms n$/30.$

TTP pald a courler $$400$ cash on $01/05$ for same$-$day delivery of the $200$ unlts of Inventory.

he $40$ unTs that OTP's customer pald for In advance in December are dellvered to the customer on OT$/06.$

On $01/07,$ OTP recelved a purchase allowance of $$1,200$ on account, and then pald the amount necessary to settle the balance

wed to the supplier for the $\frac{1}{05}$ purchase of Inventory $($In C$).$

aales of $60$ units of invertory occurring during the period of $01/07-01/10$ are recorded on $01/10.$ The sales terms are n$/30.$

collected payments on $01/74$ from sales to customers recorded on O$1$no$.$

TP pald the first $2$ weeks wages to the employees on O$1$n $6.$ The total pald is $$3,220.$

Vrote off a $$760$ customer's account balance on $0118.$ OTP uses the allowance method, not the direct write$-$off method.

ald $$2320$ on OM$1$ for December and January rent. See the earler bullets regarding the December portion. The January portion

all expire soon, so it is charged directly to expense.

TP recovered $$350$ cash on $\frac{01}{26}$ from the customer whose account had previously been written off on $01/18.$

in unrecorded $$300$ utllity bill for January arrived on $01/27.$ It Is due on $02/15$ and will be pald then.

ales of $70$ units of Inventory during the perlod of $01/10-01/28,$ with terms n$/30.$ are recorded on $01/28.$

of the sales recorded on $\frac{01}{28},10$ unts are retumed to OTP on $\frac{01}{30}.$ The inventory $15$ not damaged and can be resold. OTP

harges sales returns to a contra$-$revenue account.

On $01/31.$ OTP records the $$3,220$ employee salary that is owed but will be pald February $1.$

TP uses the aging method to estimate and adjust for uncollectlble accounts on O$1/31.$ All of OTP's accounts recelvable fall into a

Ingle aging category, for which $10\%$ is estimated to be uncollectible. $($Update the balances of both relevant accounts prior to

etermining the appropriate adjustment.$)$

ccrue interest for January on the notes payable on O$1/31.$

ccrue interest for January on Jeff Letrotsk's note on $01/31($see a$).$

eneral Journal tab $-$ Prepare all January journal entries and adjusting entries for items $($a$)$ to $($s$).$ Review the 'General

edger' and the adjusted 'Trial Balance' Tabs to see the effect of the transactions on the account balances.

$-$ial Balance tab $-$ Review the adjusted 'Trial Balance' as of January $31.$

ncome Statement tab $-$ Prepare an income statement for the period ended January $31$ in the 'Income Statement' Tab.