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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 $ 2,500 Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) 36,600 15,600 158,000 Land Accounts Payable Common Stock Retained Earnings 15.100 223,000 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, $16,80. 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 remainin 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 $ 2,500 Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) 36,600 15,600 158,000 Land Accounts Payable Common Stock Retained Earnings 15.100 223,000 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, $16,80. 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 remainin 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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 | 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.
**Exercise on Preparing an Adjusted Trial Balance** As of January 31, 2021, you're tasked with preparing an adjusted trial balance for TNT Fireworks. Below is a formatted table to assist with your adjustments: --- **TNT FIREWORKS** **Adjusted Trial Balance** Date: January 31, 2021 | **Accounts** | **Debit** | **Credit** | |--------------|-----------|------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | **Totals** | **$0** | **$0** | --- ### Instructions 1. **List Accounts**: Enter each account affected by the adjustments in the "Accounts" column. 2. **Enter Debits and Credits**: Fill in the adjusted amounts in the "Debit" and "Credit" columns. 3. **Balance the Trial Balance**: Ensure that the total debits equal the total credits, validating the accuracy of your adjustments. This adjusted trial balance serves as a critical step in preparing accurate financial statements, reflecting all necessary year-end adjustments.
Transcribed Image Text:**Exercise on Preparing an Adjusted Trial Balance** As of January 31, 2021, you're tasked with preparing an adjusted trial balance for TNT Fireworks. Below is a formatted table to assist with your adjustments: --- **TNT FIREWORKS** **Adjusted Trial Balance** Date: January 31, 2021 | **Accounts** | **Debit** | **Credit** | |--------------|-----------|------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | **Totals** | **$0** | **$0** | --- ### Instructions 1. **List Accounts**: Enter each account affected by the adjustments in the "Accounts" column. 2. **Enter Debits and Credits**: Fill in the adjusted amounts in the "Debit" and "Credit" columns. 3. **Balance the Trial Balance**: Ensure that the total debits equal the total credits, validating the accuracy of your adjustments. This adjusted trial balance serves as a critical step in preparing accurate financial statements, reflecting all necessary year-end adjustments.
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