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On January 1, 2024, the general ledger of Freedom Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Buildings Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Totals Debit $ 13,100 Credit 37,800 $ 3,700 153,900 86,300 139,000 11,500 38,600 219,000 157,300 $ 430,100 $ 430,100 During January 2024, the following transactions occur: January 1 January 4 Borrow $119,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $2,301 are required at the end of each month for 60 months. Receive $32,900 from customers on accounts receivable. January 10 Pay cash on accounts payable, $30,000. January 15 Pay cash for salaries, $30,800. January 30 Firework sales for the month total $210,800. The cost of the units sold is $122,000. January 31 Pay the first monthly installment of $2,301 related to the $119,000 borrowed on January 1. The following information is available on January 31, 2024. a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $27,400. b. The company estimates additional future uncollectible accounts of $1,628. c. Unpaid salaries at the end of January are $28,000. d. Accrued income taxes at the end of January are $9,900. e. The portion of Notes Payable (long-term) due within the next 12 months is reclassified as Notes Payable (current). The amount of the reclassification is $21,145.

On January 1, 2024, the general ledger of Freedom Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Buildings Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Totals Debit $ 13,100 Credit 37,800 $ 3,700 153,900 86,300 139,000 11,500 38,600 219,000 157,300 $ 430,100 $ 430,100 During January 2024, the following transactions occur: January 1 January 4 Borrow $119,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $2,301 are required at the end of each month for 60 months. Receive $32,900 from customers on accounts receivable. January 10 Pay cash on accounts payable, $30,000. January 15 Pay cash for salaries, $30,800. January 30 Firework sales for the month total $210,800. The cost of the units sold is $122,000. January 31 Pay the first monthly installment of $2,301 related to the $119,000 borrowed on January 1. The following information is available on January 31, 2024. a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $27,400. b. The company estimates additional future uncollectible accounts of $1,628. c. Unpaid salaries at the end of January are $28,000. d. Accrued income taxes at the end of January are $9,900. e. The portion of Notes Payable (long-term) due within the next 12 months is reclassified as Notes Payable (current). The amount of the reclassification is $21,145.

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, 2024, the general ledger of Freedom Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Buildings Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Totals Debit $ 13,100 Credit 37,800 $ 3,700 153,900 86,300 139,000 11,500 38,600 219,000 157,300 $ 430,100 $ 430,100 During January 2024, the following transactions occur: January 1 January 4 Borrow $119,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $2,301 are required at the end of each month for 60 months. Receive $32,900 from customers on accounts receivable. January 10 Pay cash on accounts payable, $30,000. January 15 Pay cash for salaries, $30,800. January 30 Firework sales for the month total $210,800. The cost of the units sold is $122,000. January 31 Pay the first monthly installment of $2,301 related to the $119,000 borrowed on January 1. The following information is available on January 31, 2024. a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $27,400. b. The company estimates additional future uncollectible accounts of $1,628. c. Unpaid salaries at the end of January are $28,000. d. Accrued income taxes at the end of January are $9,900. e. The portion of Notes Payable (long-term) due within the next 12 months is reclassified as Notes Payable (current). The amount of the reclassification is $21,145.
Transcribed Image Text:On January 1, 2024, the general ledger of Freedom Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Buildings Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Totals Debit $ 13,100 Credit 37,800 $ 3,700 153,900 86,300 139,000 11,500 38,600 219,000 157,300 $ 430,100 $ 430,100 During January 2024, the following transactions occur: January 1 January 4 Borrow $119,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $2,301 are required at the end of each month for 60 months. Receive $32,900 from customers on accounts receivable. January 10 Pay cash on accounts payable, $30,000. January 15 Pay cash for salaries, $30,800. January 30 Firework sales for the month total $210,800. The cost of the units sold is $122,000. January 31 Pay the first monthly installment of $2,301 related to the $119,000 borrowed on January 1. The following information is available on January 31, 2024. a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $27,400. b. The company estimates additional future uncollectible accounts of $1,628. c. Unpaid salaries at the end of January are $28,000. d. Accrued income taxes at the end of January are $9,900. e. The portion of Notes Payable (long-term) due within the next 12 months is reclassified as Notes Payable (current). The amount of the reclassification is $21,145.
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