On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2022) Common Stock Retained Earnings Totals Debit $ 27,100 Credit 50,200 $ 6,200 22,000 66,000 25,000 3,500 30,500 70,000 55,000 25,100 $190,300 $190,300
On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2022) Common Stock Retained Earnings Totals Debit $ 27,100 Credit 50,200 $ 6,200 22,000 66,000 25,000 3,500 30,500 70,000 55,000 25,100 $190,300 $190,300
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, the general ledger of ACME Fireworks Includes the following account balances:
Accounts
Cash
Debit.
Credit
Accounts Receivable
Allowance for Uncollectible Accounts
$ 27,100
50,200
$ 6,200
Inventory
22,000
Land
66,000
Equipment
25,000
Accumulated Depreciation
3,500
Accounts Payable
30,500
Notes Payable (6%, due April 1, 2022)
70,000
Common Stock
55,000
Retained Earnings
25,100
Totals
$190,300
$190,300
During January 2021, the following transactions occur:
January 2 Sold gift cards totaling $12,000. The cards are redeemable for merchandise within one year of the purchase
date.
January 6 Purchase additional inventory on account, $167,000.
January 15 Firework sales for the first half of the month total $155,000. All of these sales are on account. The cost
of the units sold is $83,800.
January 23 Receive $127,400 from customers on accounts receivable.
January 25 Pay $110,000 to inventory suppliers on accounts payable.
January 28 write off accounts receivable as uncollectible, $6,800.
January 30 Firework sales for the second half of the month total $163,000. Sales include $17,000 for cash and $146,000
on account. The cost of the units sold is $89,500.
January 31 Pay cash for monthly salaries, $54,000.
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 $5,200 and a two-year service life.
■The company estimates future uncollectible accounts. The company determines $31,000 of accounts receivable on January 31 are
past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not
past due, and 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance
calculated in the general ledger.)
• Accrued interest expense on notes payable for January.
• Accrued Income taxes at the end of January are $15,000.
By the end of January, $5,000 of the gift cards sold on January 2 have been redeemed.
2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event,
select "No Journal Entry Required" In the first account field.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1a3057f9-4dbe-424a-ad9c-3cf01a23e6cc%2Fb31df819-a488-40c3-ae09-ebbee96aef0e%2Fdfytt78_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[The following Information applies to the questions displayed below.]
On January 1, 2021, the general ledger of ACME Fireworks Includes the following account balances:
Accounts
Cash
Debit.
Credit
Accounts Receivable
Allowance for Uncollectible Accounts
$ 27,100
50,200
$ 6,200
Inventory
22,000
Land
66,000
Equipment
25,000
Accumulated Depreciation
3,500
Accounts Payable
30,500
Notes Payable (6%, due April 1, 2022)
70,000
Common Stock
55,000
Retained Earnings
25,100
Totals
$190,300
$190,300
During January 2021, the following transactions occur:
January 2 Sold gift cards totaling $12,000. The cards are redeemable for merchandise within one year of the purchase
date.
January 6 Purchase additional inventory on account, $167,000.
January 15 Firework sales for the first half of the month total $155,000. All of these sales are on account. The cost
of the units sold is $83,800.
January 23 Receive $127,400 from customers on accounts receivable.
January 25 Pay $110,000 to inventory suppliers on accounts payable.
January 28 write off accounts receivable as uncollectible, $6,800.
January 30 Firework sales for the second half of the month total $163,000. Sales include $17,000 for cash and $146,000
on account. The cost of the units sold is $89,500.
January 31 Pay cash for monthly salaries, $54,000.
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 $5,200 and a two-year service life.
■The company estimates future uncollectible accounts. The company determines $31,000 of accounts receivable on January 31 are
past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not
past due, and 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance
calculated in the general ledger.)
• Accrued interest expense on notes payable for January.
• Accrued Income taxes at the end of January are $15,000.
By the end of January, $5,000 of the gift cards sold on January 2 have been redeemed.
2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event,
select "No Journal Entry Required" In the first account field.)
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