**General Ledger of TNT Fireworks as of January 1, 2021****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 |---**Transactions in January 2021:**- **January 1:** Purchase equipment for $19,800. Residual value: $1,800, Service life: 6 years.- **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, $300.- **January 28:** Pay cash for January utilities, $16,800.- **January 30:** Sales for January total $223,000. All sales on account, cost of units sold: $116,500.---**Adjusting Entries Information:**a. **Depreciation:** Equipment depreciates using the straight-line method.b. **Uncollectible Accounts:** Determine $3,300 of accounts receivable are past due, 50% estimated uncollectible. Remaining accounts of January 31 not past due, 2% estimated uncollectible.c. **Interest Revenue:** Calculate on notes receivable for January.d. **Unpaid Salaries:** $32,900 at month-end.e. **Accrued Income Taxes:** $9,300 at month-end. **TNT FIREWORKS - Multiple-Step Income Statement***For the month ended January 31, 2021*---The income statement is structured in a multi-step format to provide a detailed view of financial performance. Below is a breakdown of the sections:1. **Headers**: - Title: TNT FIREWORKS - Type: Multiple-Step Income Statement - Period: For the month ended January 31, 20212. **Main Sections**: - **Revenues/Income**: (Details and amounts are not provided in the template) - **Expenses**: - Listed expenses (details not provided in the template) - Total Operating Expenses: $03. **Net Amounts**: - All financial figures indicated are placeholders marked as "$0" - The final net income or loss is not specified.The table is organized to allow for the listing and calculation of both revenues and expenses, leading to the final net profit or loss by subtracting total expenses from total revenues. This structure is essential for businesses to understand their operational efficiency and profitability.

1. Multi-Step Income Statement - Multi step income statement is the summary of revenue earned and…

On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Accounts Debit Credit $ 59,000 25,600 Cash Accounts Receivable Allowance for Uncollectible Accounts $ 2,500 Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable 36,600 15,600 158,000 15,100 223,000 Common Stock 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, $16,80o. 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. 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