On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Accounts Debit Credit Cash $ 25,700 Accounts Receivable 47,400 Allowance for Uncollectible Accounts $ 4,800 Inventory 20,600 Land 52,000 Equipment 18,000 Accumulated Depreciation 2,100 Accounts Payable 29,100 Notes Payable (6%, due April 1, 2022) 56,000 Common Stock 41,000 Retained Earnings 30,700 Totals $ 163,700 $ 163,700 During January 2021, the following transactions occur: January 2 Sold gift cards totaling $9,200. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $153,000. January 15 Firework sales for the first half of the month total $141,000. All of these sales are on account. The cost of the units sold is $76,800. January 23 Receive $126,000 from customers on accounts receivable. January 25 Pay $96,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $5,400. January 30 Firework sales for the second half of the month total $149,000. Sales include $13,000 for cash and $136,000 on account. The cost of the units sold is $82,500. January 31 Pay cash for monthly salaries, $52,600. The following information is available on January 31. 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 $3,600 and a two-year service life. At the end of January, $17,000 of accounts receivable are past due, and the company estimates that 30% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 3% will not be collected. Accrued interest expense on notes payable for January. Accrued income taxes at the end of January are $13,600. By the end of January, $3,600 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold). No Date Account Title Debit Credit 1 Jan 02 Cash Deferred Revenue 2 Jan 06 Inventory Accounts Payable 3 Jan 15 Accounts Receivable Sales Revenue 4 Jan 15 Cost of Goods Sold Inventory 5 Jan 23 Cash Accounts Receivable 6 Jan 25 Accounts Payable Cash 7 Jan 28 Allowance for Uncollectible Accounts Accounts Receivable 8 Jan 30 Accounts Receivable Cash 9 Jan 30 Cost of Goods Sold Inventory 10 Jan 31 Salaries Expense 52,600 Cash 52,600 11 Jan 31 Depreciation Expense 600 Accumulated Depreciation 600 12 Jan 31 Bad Debt Expense Allowance for Uncollectible Accounts 13 Jan 31 Interest Expense 280 Interest Payable 280 14 Jan 31 Income Tax Expense 13,600 13,600 15 Jan 31 Deferred Revenue Sales Revenue 16 Jan 31 Sales Revenue Retained Earnings 17 Jan 31 Retained Earnings Cost of Goods Sold Salaries Expense Bad Debt Expense Depreciation Expense Interest Expense Income Tax Expense

On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Accounts Debit Credit Cash $ 25,700 Accounts Receivable 47,400 Allowance for Uncollectible Accounts $ 4,800 Inventory 20,600 Land 52,000 Equipment 18,000 Accumulated Depreciation 2,100 Accounts Payable 29,100 Notes Payable (6%, due April 1, 2022) 56,000 Common Stock 41,000 Retained Earnings 30,700 Totals $ 163,700 $ 163,700 During January 2021, the following transactions occur: January 2 Sold gift cards totaling $9,200. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $153,000. January 15 Firework sales for the first half of the month total $141,000. All of these sales are on account. The cost of the units sold is $76,800. January 23 Receive $126,000 from customers on accounts receivable. January 25 Pay $96,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $5,400. January 30 Firework sales for the second half of the month total $149,000. Sales include $13,000 for cash and $136,000 on account. The cost of the units sold is $82,500. January 31 Pay cash for monthly salaries, $52,600. The following information is available on January 31. 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 $3,600 and a two-year service life. At the end of January, $17,000 of accounts receivable are past due, and the company estimates that 30% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 3% will not be collected. Accrued interest expense on notes payable for January. Accrued income taxes at the end of January are $13,600. By the end of January, $3,600 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold). No Date Account Title Debit Credit 1 Jan 02 Cash Deferred Revenue 2 Jan 06 Inventory Accounts Payable 3 Jan 15 Accounts Receivable Sales Revenue 4 Jan 15 Cost of Goods Sold Inventory 5 Jan 23 Cash Accounts Receivable 6 Jan 25 Accounts Payable Cash 7 Jan 28 Allowance for Uncollectible Accounts Accounts Receivable 8 Jan 30 Accounts Receivable Cash 9 Jan 30 Cost of Goods Sold Inventory 10 Jan 31 Salaries Expense 52,600 Cash 52,600 11 Jan 31 Depreciation Expense 600 Accumulated Depreciation 600 12 Jan 31 Bad Debt Expense Allowance for Uncollectible Accounts 13 Jan 31 Interest Expense 280 Interest Payable 280 14 Jan 31 Income Tax Expense 13,600 13,600 15 Jan 31 Deferred Revenue Sales Revenue 16 Jan 31 Sales Revenue Retained Earnings 17 Jan 31 Retained Earnings Cost of Goods Sold Salaries Expense Bad Debt Expense Depreciation Expense Interest Expense Income Tax Expense

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, 2021, the general ledger of ACME Fireworks includes the following account balances:

Accounts	Debit		Credit
Cash	$	25,700
Accounts Receivable		47,400
Allowance for Uncollectible Accounts				$	4,800
Inventory		20,600
Land		52,000
Equipment		18,000
Accumulated Depreciation					2,100
Accounts Payable					29,100
Notes Payable (6%, due April 1, 2022)					56,000
Common Stock					41,000
Retained Earnings					30,700
Totals	$	163,700		$	163,700

During January 2021, the following transactions occur:

January	2	Sold gift cards totaling $9,200. The cards are redeemable for merchandise within one year of the purchase date.
January	6	Purchase additional inventory on account, $153,000.
January	15	Firework sales for the first half of the month total $141,000. All of these sales are on account. The cost of the units sold is $76,800.
January	23	Receive $126,000 from customers on accounts receivable.
January	25	Pay $96,000 to inventory suppliers on accounts payable.
January	28	Write off accounts receivable as uncollectible, $5,400.
January	30	Firework sales for the second half of the month total $149,000. Sales include $13,000 for cash and $136,000 on account. The cost of the units sold is $82,500.
January	31	Pay cash for monthly salaries, $52,600.

The following information is available on January 31.

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 $3,600 and a two-year service life.
At the end of January, $17,000 of accounts receivable are past due, and the company estimates that 30% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 3% will not be collected.
Accrued interest expense on notes payable for January.
Accrued income taxes at the end of January are $13,600.
By the end of January, $3,600 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold).

No	Date	Account Title	Debit	Credit
1	Jan 02	Cash
		Deferred Revenue

2	Jan 06	Inventory
		Accounts Payable

3	Jan 15	Accounts Receivable
		Sales Revenue

4	Jan 15	Cost of Goods Sold
		Inventory

5	Jan 23	Cash
		Accounts Receivable

6	Jan 25	Accounts Payable
		Cash

7	Jan 28	Allowance for Uncollectible Accounts
		Accounts Receivable

8	Jan 30	Accounts Receivable
		Cash

9	Jan 30	Cost of Goods Sold
		Inventory

10	Jan 31	Salaries Expense	52,600
		Cash		52,600

11	Jan 31	Depreciation Expense	600
		Accumulated Depreciation		600

12	Jan 31	Bad Debt Expense
		Allowance for Uncollectible Accounts

13	Jan 31	Interest Expense	280
		Interest Payable		280

14	Jan 31	Income Tax Expense	13,600
				13,600

15	Jan 31	Deferred Revenue
		Sales Revenue

16	Jan 31	Sales Revenue
		Retained Earnings

17	Jan 31	Retained Earnings
		Cost of Goods Sold
		Salaries Expense
		Bad Debt Expense
		Depreciation Expense
		Interest Expense
		Income Tax Expense

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