On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances: AccountsDebitCreditCash$24,300 Accounts Receivable42,500 Allowance for Uncollectible Accounts $2,700Inventory42,000 Land79,600 Accounts Payable 29,200Notes Payable (8%, due in 3 years) 42,000Common Stock 68,000Retained Earnings 46,500Totals$188,400$188,400 The $42,000 beginning balance of inventory consists of 420 units, each costing $100. During January 2024, Big Blast Fireworks had the following inventory transactions: January 3Purchase 1,050 units for $115,500 on account ($110 each).January 8Purchase 1,150 units for $132,250 on account ($115 each).January 12Purchase 1,250 units for $150,000 on account ($120 each).January 15Return 160 of the units purchased on January 12 because of defects.January 19Sell 3,600 units on account for $576,000. The cost of the units sold is determined using a FIFO perpetual inventory system.January 22Receive $529,000 from customers on accounts receivable.January 24Pay $359,000 to inventory suppliers on accounts payable.January 27Write off accounts receivable as uncollectible, $2,100.January 31Pay cash for salaries during January, $110,000. The following information is available on January 31, 2024. At the end of January, the company estimates that the remaining units of inventory purchased on January 12 are expected to sell in February for only $100 each. [Hint: Determine the number of units remaining from January 12 after subtracting the units returned on January 15 and the units assumed sold (FIFO) on January 19.]The company records an adjusting entry for $5,070 for estimated future uncollectible accounts.The company accrues interest on notes payable for January. Interest is expected to be paid each December 31.The company accrues income taxes at the end of January of $13,500. Record all 4 1234At the end of January, the company estimates that the remaining units ofinventory purchased on January 12 are expected to sell in February for only$100 each. Record the adjusting entry for net realizable value.Note: Enter debits before credits.DateJanuary 31General JournalDebitCreditView general journalRecord entryClear entry

The objective of the question is to record the adjusting entry for net realizable value of the…

Answered: 1 2 3 4 At the end of January, the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances:

Accounts	Debit	Credit
Cash	$24,300
Accounts Receivable	42,500
Allowance for Uncollectible Accounts		$2,700
Inventory	42,000
Land	79,600
Accounts Payable		29,200
Notes Payable (8%, due in 3 years)		42,000
Common Stock		68,000
Retained Earnings		46,500
Totals	$188,400	$188,400

The $42,000 beginning balance of inventory consists of 420 units, each costing $100. During January 2024, Big Blast Fireworks had the following inventory transactions:

January 3	Purchase 1,050 units for $115,500 on account ($110 each).
January 8	Purchase 1,150 units for $132,250 on account ($115 each).
January 12	Purchase 1,250 units for $150,000 on account ($120 each).
January 15	Return 160 of the units purchased on January 12 because of defects.
January 19	Sell 3,600 units on account for $576,000. The cost of the units sold is determined using a FIFO perpetual inventory system.
January 22	Receive $529,000 from customers on accounts receivable.
January 24	Pay $359,000 to inventory suppliers on accounts payable.
January 27	Write off accounts receivable as uncollectible, $2,100.
January 31	Pay cash for salaries during January, $110,000.

The following information is available on January 31, 2024.

At the end of January, the company estimates that the remaining units of inventory purchased on January 12 are expected to sell in February for only $100 each. [Hint: Determine the number of units remaining from January 12 after subtracting the units returned on January 15 and the units assumed sold (FIFO) on January 19.]
The company records an adjusting entry for $5,070 for estimated future uncollectible accounts.
The company accrues interest on notes payable for January. Interest is expected to be paid each December 31.
The company accrues income taxes at the end of January of $13,500.

Record all 4

1
2
3
4
At the end of January, the company estimates that the remaining units of
inventory purchased on January 12 are expected to sell in February for only
$100 each. Record the adjusting entry for net realizable value.
Note: Enter debits before credits.
Date
January 31
General Journal
Debit
Credit
View general journal
Record entry
Clear entry

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