### Educational Website Content: Understanding a Classified Balance Sheet#### Example: TNT Fireworks Balance Sheet**Balance Sheet Date**: January 31, 2021A balance sheet is a financial statement that provides a snapshot of a business's financial position at a specific point in time. It clearly outlines the assets, liabilities, and stockholders' equity.---#### Assets- **Cash**: [Amount not filled]- **Accounts Receivable**: [Amount not filled]*Additional lines for other current or long-term assets, which are yet to be filled.*- **Total Current Assets**: $0 *Additional space for entering further asset details.*- **Total Assets**: $0 ---#### Liabilities- **Accounts Payable**: [Amount not filled]*Additional lines for other current or long-term liabilities, which are yet to be filled.*- **Total Current Liabilities**: $0 ---#### Stockholders' Equity- **Total Stockholders' Equity**: $0 ---#### Summary- **Total Liabilities and Stockholders' Equity**: $0 ---### Explanation:This classified balance sheet is structured to clearly show the breakdown of the assets, liabilities, and equity of TNT Fireworks as of January 31, 2021. All numeric fields are currently filled with zero, indicating that asset and liability data need to be input.- **Assets Section**: Lists all assets, starting with the most liquid (Cash), followed by other receivables and potentially long-term assets. - **Liabilities Section**: Lists debts and obligations, starting with the most immediate (Accounts Payable).- **Stockholders' Equity**: Reflects the owners' claims after liabilities have been settled.In practice, this formatted balance sheet would help users understand the financial health of the business by comparing assets and liabilities to determine how well the business can meet its financial obligations. *Note: Deductible amounts in a real balance sheet would be represented with a minus sign as indicated in the instructions above.* On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances:| Accounts | Debit | Credit ||--------------------------------------------|-----------|-----------|| Cash | $ 59,000 | || Accounts Receivable | 25,600 | || Allowance for Uncollectible Accounts | | $ 2,500 || Inventory | 36,600 | || Notes Receivable (5%, due in 2 years) | 15,600 | || Land | 158,000 | || Accounts Payable | | 15,100 || Common Stock | | 223,000 || Retained Earnings | | 54,200 || **Totals** | $294,800 | $294,800 |During January 2021, the following transactions occur:- **January 1:** Purchase equipment for $19,800. The company estimates a residual value of $1,800 and a six-year service life.- **January 4:** Pay cash on accounts payable, $9,800.- **January 8:** Purchase additional inventory on account, $85,900.- **January 15:** Receive cash on accounts receivable, $22,300.- **January 19:** Pay cash for salaries, $30,100.- **January 28:** Pay cash for January utilities, $16,800.- **January 30:** Sales for January total $223,000. All of these sales are on account. The cost of the units sold is $116,500.### Information for adjusting entries:a. **Depreciation** on the equipment for the month of January is calculated using the straight-line method.b. The company **estimates future uncollectible accounts**. The company determines $3,300 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 2% of these accounts are estimated to be uncollectible. *(Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)*c. **Accrued interest revenue** on notes receivable for January.d. **Un

Cash Sr. No. Debit ($) Sr. No. Credit ($) Opening 59000 Jan-01 19800 Jan-15 22300 Jan-04…

On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Accounts Cash Accounts Recelvable Debit Credit $ 59,000 25,600 Allowance for Uncollectible Accounts $ 2,500 36,600 Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock 15,600 158,000 15,100 223,000 54.200 Retained Earnings Totals $294,800 $294,800 During January 2021, the following transactions occur: January 1 Purchase equipment for $19,800. The company estimates a residual value of $1,800 and a six-year service life. January 4 Pay cash on accounts payable, $9,800o. January 8 Purchase additional inventory on account, $85,900. January 15 Receive cash on accounts receivable, $22,300. January 19 Pay cash for salaries, $30,100. January 28 Pay cash for January utilities, $16,800. January 30 Sales for January total $223,000. All of these sales are on account. The cost of the units sold is $116,500. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company estimates future uncollectible accounts. The company determines $3,300 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remainir accounts receivable on January 31 are not past due, and 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest revenue on notes receivable for January. d. Unpaid salaries at the end of January are $32,900. e. Accrued income taxes at the end of January are $9,300.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q