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 Notes Receivable (5%, due in 2 years) 36,600 15,600 158,000 Land 15,100 223,000 54,200 $294,800 Accounts Payable Common Stock Retained Earnings Totals $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. Unpaid salaries at the end of January are $32,900. e. Accrued income taxes at the end of January are $9,300.
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 Notes Receivable (5%, due in 2 years) 36,600 15,600 158,000 Land 15,100 223,000 54,200 $294,800 Accounts Payable Common Stock Retained Earnings Totals $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. Unpaid salaries at the end of January are $32,900. e. Accrued income taxes at the end of January are $9,300.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:### TNT Fireworks General Ledger and Adjusting Entries
#### General Ledger Account Balances (as of January 1, 2021)
| 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 During January 2021
- **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 sales are on account. The cost of the units sold is $116,500.
#### Information for Adjusting Entries
a. **Depreciation:** On equipment for the month of January is calculated using the straight-line method.
b. **Uncollectible Accounts:** The company estimates future uncollectible accounts. $3,300 of accounts receivable on January 31 are past due, and 50% are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 2% are estimated to be uncollectible. (Use the January 31 accounts receivable balance calculated in the general ledger.)
c. **Interest Revenue:** Accrued interest on notes receivable for January.
d. **Salaries Payable:** Unpaid salaries at the end of January are $32,
Transcribed Image Text:**Journal Entry Worksheet**
**Transaction:**
Purchase additional inventory on account, $85,900.
**Note:** Enter debits before credits.
**Table:**
- **Date:** January 08
- **Columns:**
- **General Journal**
- **Debit**
- **Credit**
**Actions:**
- **Record entry** button
- **Clear entry** button
- **View general journal** button
This worksheet is designed to assist with recording financial transactions in a journal entry format. The example details a transaction where inventory is purchased on account for $85,900. Users are prompted to input the relevant debits and credits, starting with debits as instructed. The user can interact with the worksheet through options to record, clear, or view entries.
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