wasil JL.UUU 7 Jan 28 5,000 Allowance for Uncollectible Accounts Accounts Receivable 5,000 8 Jan 30 Sales Revenue x Retained Earnings X 11 Jan 31 Depreciation Expense Accumulated Depreciation 12 Jan 31 Bad Debt Expense Allowance for Uncollectible Accounts 13 Jan 31 Interest Receivable X Interest Revenue X 15 Jan 31 Deferred Revenue Sales Revenue 16 Jan 31 Sales Revenue Retained Earnings 17 Jan 31 Retained Earnings Depreciation Expense Salaries Expense Interest Expense Income Tax Expense Cost of Goods Sold Bad Debt Expense On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Credit Debit $ 25, 300 46,600 $ 4,400 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2022) Common Stock Retained Earnings Totals 20,200 48,000 16,500 1,700 28,700 52,000 37,000 32,800 $156,600 $156,600 During January 2021, the following transactions occur: January 2 Sold gift cards totaling $8,400. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $149,000. January 15 Firework sales for the first half of the month total $137,000. All of these sales are on account. The cost of the units sold is $74,800. January 23 Receive $125,600 from customers on accounts receivable. January 25 Pay $92,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $5,000. January 30 Firework sales for the second half of the month total $145,000. Sales include $15,000 for cash and $130,000 on account. The cost of the units sold is $80,500. January 31 Pay cash for monthly salaries, $52,200. The following information is available on January 31. a. 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. b. The company estimates future uncollectible accounts. The company determines $13,000 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.) C. Accrued interest expense on notes payable for January. d. Accrued income taxes at the end of January are $13,200. e. By the end of January, $3,200 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold)
