On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Debit Credit Cash $24,300 Accounts Receivable 42,500 Allowance for Uncollectible Accounts $2,700 Inventory 42,000 Land 79,600 Accounts Payable 29,200 Notes Payable (8%, due in 3 years) 42,000 Common Stock 68,000 Retained Earnings 46,500 Totals $188,400 $188,400 The $42,000 beginning balance of inventory consists of 420 units, each costing $100. During January 2024, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,050 units for $115,500 on account ($110 each). January 8 Purchase 1,150 units for $132,250 on account ($115 each). January 12 Purchase 1,250 units for $150,000 on account ($120 each). January 15 Return 160 of the units purchased on January 12 because of defects. January 19 Sell 3,600 units on account for $576,000. The cost of the units sold is determined using a FIFO perpetual inventory system. January 22 Receive $529,000 from customers on accounts receivable. January 24 Pay $359,000 to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $2,100. January 31 Pay cash for salaries during January, $110,000. The following information is available on January 31, 2024. At the end of January, the company estimates that the remaining units of inventory purchased on January 12 are expected to sell in February for only $100 each. [Hint: Determine the number of units remaining from January 12 after subtracting the units returned on January 15 and the units assumed sold (FIFO) on January 19.] The company records an adjusting entry for $5,070 for estimated future uncollectible accounts. The company accrues interest on notes payable for January. Interest is expected to be paid each December 31. The company accrues income taxes at the end of January of $13,500.

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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Question

On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances:

Accounts	Debit	Credit
Cash	$24,300
Accounts Receivable	42,500
Allowance for Uncollectible Accounts		$2,700
Inventory	42,000
Land	79,600
Accounts Payable		29,200
Notes Payable (8%, due in 3 years)		42,000
Common Stock		68,000
Retained Earnings		46,500
Totals	$188,400	$188,400

The $42,000 beginning balance of inventory consists of 420 units, each costing $100. During January 2024, Big Blast Fireworks had the following inventory transactions:

January 3	Purchase 1,050 units for $115,500 on account ($110 each).
January 8	Purchase 1,150 units for $132,250 on account ($115 each).
January 12	Purchase 1,250 units for $150,000 on account ($120 each).
January 15	Return 160 of the units purchased on January 12 because of defects.
January 19	Sell 3,600 units on account for $576,000. The cost of the units sold is determined using a FIFO perpetual inventory system.
January 22	Receive $529,000 from customers on accounts receivable.
January 24	Pay $359,000 to inventory suppliers on accounts payable.
January 27	Write off accounts receivable as uncollectible, $2,100.
January 31	Pay cash for salaries during January, $110,000.

The following information is available on January 31, 2024.

At the end of January, the company estimates that the remaining units of inventory purchased on January 12 are expected to sell in February for only $100 each. [Hint: Determine the number of units remaining from January 12 after subtracting the units returned on January 15 and the units assumed sold (FIFO) on January 19.]
The company records an adjusting entry for $5,070 for estimated future uncollectible accounts.
The company accrues interest on notes payable for January. Interest is expected to be paid each December 31.
The company accrues income taxes at the end of January of $13,500.

Journal entry worksheet
<
1
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3
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Record purchase of 1,050 units for $115,500 on account ($110 each).
Note: Enter debits before credits.
Date
January 03
10
110
General Journal
Debit
Credit
>

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