Un 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 (8%, due in 3 years) Common Stock Retained Earnings Totals Debit Credit $ 22,500 38,000 $ 3,700 33,000 66,100 30,900 33,000 59,000 33,000 $159,600 $159, 600 The $33,000 beginning balance of inventory consists of 330 units, each costing $100. During January 2021, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,200 units for $129,600 on account ($108 each). January 8 Purchase 1,300 units for $146,900 on account ($113 each). January 12 Purchase 1,400 units for $165,200 on account ($118 each). January 15 Return 115 of the units purchased on January 12 because of defects. January 19 Sell 4,000 units on account for $600,000. The cost of the units sold is determined using a FIFO perpetual inventory system. January 22 Receive $577,000 from customers on accounts receivable. January 24 Pay $407,000 to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $2,800. January 31 Pay cash for salaries during January, $117,000. The following information is available on January 31, 2021. 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 $4,300 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 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 $12,600. 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 $4,300 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 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 $12,600. 3. Prepare an adjusted trial balance as of January 31, 2021. BIG BLAST FIREWORKS Adjusted Trial Balance January 31, 2021 Accounts Debit Credit 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 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 sign.) BIG BLAST FIREWORKS Classified Balance Sheet January 31, 2021 Assets Liabilities Total current assets 0 Total current liabilities Total liabilities Stockholders' Equity Total stockholders' equity
