On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Debit $ 59,000 25,600 Accounts Credit Cash Accounts Receivable Allowance for Uncollectible Accounts $ 2,500 Inventory 36,600 15,600 Notes Receivable (5%, due in 2 years) Land 158,000 Accounts Payable 15,100 223,000 54,200 $294.800 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 remaini 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: Debit $ 59,000 25,600 Accounts Credit Cash Accounts Receivable Allowance for Uncollectible Accounts $ 2,500 Inventory 36,600 15,600 Notes Receivable (5%, due in 2 years) Land 158,000 Accounts Payable 15,100 223,000 54,200 $294.800 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 remaini 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
Related questions
Question
Transcribed Image Text:b-1. Calculate the profit margin for the month of January.
Profit Margin
Choose Numerator
Choose Denominator
Profit Margin
Profit Margin
%3D
II
II
Transcribed Image Text: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
Land
158,000
Accounts Payable
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, $22,30O.
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.
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