The Accounting Cycle General Ledger Case #2 Saved Part 1 of 7 Required information Exercise 6-21B Complete the accounting cycle using inventory transactions (LO6-2, 6-3, 6-5, 6-6, 6-7) (The following information applies to the questions displayed below.) 3.57 On January 1, Year 1, the general ledger of a company includes the following account balances: points eBook Ask 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 $ 25, 700 46,000 $ 4,100 49,000 90, 100 25,700 49,000 75,000 57,000 $210,800 $ 210,800 References The $49,000 beginning balance of inventory consists of 490 units, each costing $100. During January Year 1, the company had the following inventory transactions: January 3 Purchase 1,750 units for $196,000 on account ($112 each). January 8 Purchase 1,850 units for $216,450 on account ($117 each). January 12 Purchase 1,950 units for $237,900 on account ($122 each). January 15 Return 195 of the units purchased on January 12 because of defects. January 19 Sell 5,700 units on account for $855,000. The cost of the units sold is determined using a FIFO perpetual inventory system. January 22 Receive $837,000 from customers on accounts receivable. January 24 Pay $620,000 to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $2,800. January 31 Pay cash for salaries during January, $138,000. The following information is available on January 31, Year 1. 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 $5,900 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 $14,200. Exercise 6-21B Part 1 Required: 1. Record each of the transactions listed above, assuming a FIFO perpetual inventory system. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Exercise 6-21B Part 3 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, $5,900 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 $14,200. 3. Prepare an adjusted trial balance as of January 31, Year 1. Adjusted Trial Balance January 31, Year 1 Debit Accounts Credit Totals 0 $ Exercise 6-21B Part 4 4. Prepare a multiple-step income statement for the period ended January 31, Year 1. Multiple-step Income Statement For the year ended January 31, Year 1 Total operating expenses Operating income (loss) Exercise 6-21B Part 5 5. Prepare a classified balance sheet as of January 31, Year 1. (Amounts to be deducted should be indicated with a minus sign.) Classified Balance Sheet January 31, Year 1 Assets Liabilities Total current assets 0 Total current liabilities Total liabilities Stockholders' Equity $ Total assets Total stockholders' equity ol Total liabilities and stockholders' s equity