Wildhorse Co's balance sheet at December 31, 2021, is presented below. Wildhorse Co. Balance Sheet December 31, 2021 Cash $14,290 Accounts payable Accounts receivable 20,800 Common stock Allowance for doubtful accounts (790) Retained earnings Inventory 10,280 $44,580 $8,980 19,200 16,400 $44,580 During January 2022, the following transactions occurred. Wildhorse uses the perpetual inventory method. Jan. 1 3 8 11 15 Wildhorse accepted a 4-month, 8% note from Betheny Company in payment of Betheny's $1,200 account. Wildhorse wrote off as uncollectible the accounts of Walter Corporation ($400) and Drake Company ($300). Wildhorse purchased $15,710 of inventory on account. Wildhorse sold for $25,100 on account inventory that cost $17,970. Wildhorse sold inventory that cost $700 to Jack Rice for $900. Rice charged this amount on his Visa First Bank card. The service fee charged Wildhorse by First Bank is 3%. Wildhorse collected $23,300 from customers on account. Wildhorse paid $17,490 on accounts payable. Wildhorse received payment in full ($300) from Drake Company on the account written off on January 3. Wildhorse purchased advertising supplies for $1,260 cash. Wildhorse paid other operating expenses, $2,920. 17 21 24 27 31 Adjustment data: 1. 2. 3. Interest is recorded for the month on the note from January 1. Bad debts are expected to be 6% of the January 31, 2022, accounts receivable. A count of advertising supplies on January 31, 2022, reveals that $530 remains unused. The income tax rate is 30%. (Hint: Prepare the income statement up to Income before taxes and multiply by 30% to compute the amount; round to whole dollars.) 4. Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual inventory system.) (Round answers to decimal places, e.g. 1,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Debit Credit Account Titles and Explanation Notes Receivable Jan. 1 1,200 Accounts Receivable Jan. 3 Allowance for Doubtful Accounts 700 Accounts Receivable Jan. 8 Inventory 15,710 Accounts Payable Jan. 11 Accounts Receivable 25,100 Sales Revenue (To record sales revenues.) Jan. 11 Cost of Goods Sold 17,970 Inventory (To record cost of goods sold.) Jan. 15 Cash 873 Service Charge Expense 27 Sales Revenue (To record sales revenues and service charges.) Jan. 15 Cost of Goods Sold 700 Inventory Jan. 17 v Cash 23,300 Accounts Receivable Jan. 21 Accounts Payable 17,490 Cash Jan. 24 > Accounts Receivable 300 Allowance for Doubtful Accounts (To reverse allowance for doubtful debts.) Jan. 24 V Cash 300 Allowance for Doubtful Accounts (To record cash received from Drake Company.) Supplies Jan. 27 1,260 Cash Jan. 31 Other Operating Expenses 2,920 Cash Jan. 31 (1) Interest Receivable 8 Interest Revenue (2) Bad Debts Expense Allowance for Doubtful Accounts (3) Supplies Expense 730 Supplies (4) Income Tax Expense Income Tax Expense Prepare an adjusted trial balance at January 31, 2022. (Round answers to decimal places, eg. 1,250.) WILDHORSE CO. Adjusted Trial Balance January 31, 2022 Debit $ Credit Cash Inventory Accounts Receivable Allowance for Doubtful Accounts Supplies Interest Receivable Notes Receivable Accounts Payable Income Taxes Payable Common Stock Retained Earnings Sales Revenue Interest Revenue Cost of Goods Sold Service Charge Expense Supplies Expense Other Operating Expenses Income Tax Expense Bad Debts Expense Totals $ $ $ Prepare an income statement for the month ending January 31, 2022. (Round answers to 0 decimal places, eg. 1,250.) WILDHORSE CO. Income Statement For the Month Ending January 31, 2022 Sales Revenues $ Cost of Goods Sold Gross Profit Operating Expenses $ Other Operating Expenses Bad Debts Expense Total Operating Expenses Income From Operations Other Revenues and Gains Income Before Income Taxes Income Tax Expense Net Income /(Loss) $ Prepare a retained earnings statement for the month ending January 31, 2022. (Round answers to decimal places, eg. 1,250.) WILDHORSE CO. Retained Earnings Statement For the Month Ending January 31, 2022 Retained Earnings, January 1 Add : Net Income / (Loss) Retained Earnings, January 31 WILDHORSE CO. Balance Sheet January 31, 2022 Assets Current Assets Cash Inventory Accounts Receivable $ $ Less : Allowance for Doubtful Accounts Interest Receivable Notes Receivable Total Assets $ Liabilities and Stockholders' Equity Current Liabilities Accounts Payable $ $ Income Taxes Payable Total Liabilities $ $ Stockholders' Equity Common Stock $ $ Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity $