**Transcription of Image for Educational Website:**---**Instruction:**3. Prepare an adjusted trial balance as of January 31, Year 1.**Diagram: Adjusted Trial Balance**This table is designed for organizing financial data by listing all accounts along with their respective debit and credit balances to create an adjusted trial balance. The table is laid out as follows:- **Title: Adjusted Trial Balance**- **Date: January 31, Year 1**- **Column Headers:** - **Accounts**: This column is reserved for listing the account names. - **Debit**: Amounts that are debited in the accounts. - **Credit**: Amounts that are credited in the accounts.- **Rows:** - There are multiple rows for entering different account names under the "Accounts" column, along with their corresponding debit or credit values.- **Totals Row:** - At the bottom of the table, there is a row labeled "Totals" with spaces for total amounts in both the "Debit" and "Credit" columns, currently marked as $0 for demonstration.This table is a vital component of the accounting process, ensuring that debits equal credits after adjusting entries are made, thus maintaining the accounting equation's integrity. ### General Ledger Overview (January 1, Year 1)The company's general ledger includes the following account balances:| **Accounts** | **Debit** | **Credit** ||--------------------------------------------|------------|------------|| Cash | $25,600 | || Accounts Receivable | $47,200 | || Allowance for Uncollectible Accounts | | $4,700 || Inventory | $20,500 | || Land | $51,000 | || Equipment | $17,500 | || Accumulated Depreciation | | $2,000 || Accounts Payable | | $29,000 || Notes Payable (6%, due April 1, Year 2) | | $55,000 || Common Stock | | $40,000 || Retained Earnings | | $31,100 || **Totals** | **$161,800**| **$161,800**|### Transactions for January Year 1During January, the following transactions took place:- **January 2**: Sold gift cards totaling $9,000. The cards are redeemable for merchandise within one year of purchase.- **January 6**: Purchased additional inventory on account, costing $152,000.- **January 15**: Sales for the first half of the month total $140,000, all on account. The cost of the units sold is $76,300.- **January 23**: Received $125,900 from customers on accounts receivable.- **January 25**: Paid $95,000 to inventory suppliers on accounts payable.- **January 28**: Wrote off accounts receivable as uncollectible, amounting to $5,300.- **January 30**: Sales for the second half of the month total $148,000. Sales include $10,000 for cash and $138,000 on account. The cost of the units sold is $82,000.- **January 31**: Paid cash for monthly salaries, totaling $52,500.

Gift cards sold are recorded as debit to cash and credit to a liability account named as Gift…

Answered: 3. Prepare an adjusted trial balance as…

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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