4. Prepare a multiple-step income statement for the period ended January 31, 2024. BIG BLAST FIREWORKS Multiple-Step Income Statement For the Month Ended January 31, 2024 Total operating expenses Operating income (loss) 0
4. Prepare a multiple-step income statement for the period ended January 31, 2024. BIG BLAST FIREWORKS Multiple-Step Income Statement For the Month Ended January 31, 2024 Total operating expenses Operating income (loss) 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 6-21 (Algo) Part 4
4. Prepare a multiple-step income statement for the period ended January 31, 2024.
BIG BLAST FIREWORKS
Multiple-Step Income Statement
For the Month Ended January 31, 2024
Total operating expenses
Operating income (loss)
0
![Required information
Exercise 6-21 (Algo) Complete the accounting cycle using inventory transactions (LO6-2, 6-3, 6-5, 6-6, 6-
7)
On January 1, 2024, 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
$24,900
44,000
45,000
84,100
$198,000
Credit
$3,300
27,700
45,000
71,000
51,000
$198,000
The $45,000 beginning balance of inventory consists of 450 units, each costing $100. During January 2024, Big Blast
Fireworks had the following inventory transactions:
January 3 Purchase 1,350 units for $145,800 on account ($108 each).
January 8 Purchase 1,450 units for $163,850 on account ($113 each).
January 12 Purchase 1,550 units for $182,900 on account ($118 each).
January 15 Return 175 of the units purchased on January 12 because of defects.
January 19 Sell 4,500 units on account for $675,000. The cost of the units sold is determined using a FIFO perpetual
inventory system.
January 22 Receive $661,000 from customers on accounts receivable.
January 24 Pay $440,000 to inventory suppliers on accounts payable.
January 27 Write off accounts receivable as uncollectible, $2,400.
January 31 Pay cash for salaries during January, $134,000.
The following information is available on January 31, 2024.
a. 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.]
b. The company records an adjusting entry for $3,255 for estimated future uncollectible accounts.
c. The company accrues interest on notes payable for January. Interest is expected to be paid each December 31.
d. The company accrues income taxes at the end of January of $13,800.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6cc7f50f-d138-49da-9b74-46f891cdbc24%2F0f57b2b3-ce9d-4e84-990c-2f9a77791c30%2Fzo1t9o_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
Exercise 6-21 (Algo) Complete the accounting cycle using inventory transactions (LO6-2, 6-3, 6-5, 6-6, 6-
7)
On January 1, 2024, 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
$24,900
44,000
45,000
84,100
$198,000
Credit
$3,300
27,700
45,000
71,000
51,000
$198,000
The $45,000 beginning balance of inventory consists of 450 units, each costing $100. During January 2024, Big Blast
Fireworks had the following inventory transactions:
January 3 Purchase 1,350 units for $145,800 on account ($108 each).
January 8 Purchase 1,450 units for $163,850 on account ($113 each).
January 12 Purchase 1,550 units for $182,900 on account ($118 each).
January 15 Return 175 of the units purchased on January 12 because of defects.
January 19 Sell 4,500 units on account for $675,000. The cost of the units sold is determined using a FIFO perpetual
inventory system.
January 22 Receive $661,000 from customers on accounts receivable.
January 24 Pay $440,000 to inventory suppliers on accounts payable.
January 27 Write off accounts receivable as uncollectible, $2,400.
January 31 Pay cash for salaries during January, $134,000.
The following information is available on January 31, 2024.
a. 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.]
b. The company records an adjusting entry for $3,255 for estimated future uncollectible accounts.
c. The company accrues interest on notes payable for January. Interest is expected to be paid each December 31.
d. The company accrues income taxes at the end of January of $13,800.
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