On January 1, 2024, the general ledger of TNT Fireworks includes the following account balances: Accounts Cash Debit $60,400 Credit Accounts Receivable 28,400 Allowance for Uncollectible Accounts $3,900 Inventory 38,000 Notes Receivable (5%, due in 2 years) 32,400 Land 172,000 Accounts Payable 16,500 Common Stock 237,000 Retained Earnings 73,800 Totals $331,200 $331,200 During January 2024, the following transactions occur. January 1 Purchase equipment for $21,200. The company estimates a residual value of $3,200 and a four-year service life. January 4 Pay cash on accounts payable. $11,200. January 8 Purchase additional inventory on account, $99,900. January 15 Receive cash on accounts receivable, $23,700. January 19 Pay cash for salaries, $31,500. January 28 Pay cash for January utilities, $18,200. January 30 Firework sales for January total $237,000. All of these sales are on account. The cost of the units sold is $123,500. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company records an adjusting entry for $5,560 for estimated future uncollectible accounts. c. The company has accrued interest on notes receivable for January. d. Unpaid salaries owed to employees at the end of January are $34,300. e. The company accrued income taxes at the end of January $10,700. Prepare an adjusted trial balance as of January 31, 2024.
On January 1, 2024, the general ledger of TNT Fireworks includes the following account balances: Accounts Cash Debit $60,400 Credit Accounts Receivable 28,400 Allowance for Uncollectible Accounts $3,900 Inventory 38,000 Notes Receivable (5%, due in 2 years) 32,400 Land 172,000 Accounts Payable 16,500 Common Stock 237,000 Retained Earnings 73,800 Totals $331,200 $331,200 During January 2024, the following transactions occur. January 1 Purchase equipment for $21,200. The company estimates a residual value of $3,200 and a four-year service life. January 4 Pay cash on accounts payable. $11,200. January 8 Purchase additional inventory on account, $99,900. January 15 Receive cash on accounts receivable, $23,700. January 19 Pay cash for salaries, $31,500. January 28 Pay cash for January utilities, $18,200. January 30 Firework sales for January total $237,000. All of these sales are on account. The cost of the units sold is $123,500. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company records an adjusting entry for $5,560 for estimated future uncollectible accounts. c. The company has accrued interest on notes receivable for January. d. Unpaid salaries owed to employees at the end of January are $34,300. e. The company accrued income taxes at the end of January $10,700. Prepare an adjusted trial balance as of January 31, 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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On January 1, 2024, the general ledger of TNT Fireworks includes the following account balances:
Accounts
Cash
Debit
$60,400
Credit
Accounts Receivable
28,400
Allowance for Uncollectible Accounts
$3,900
Inventory
38,000
Notes Receivable (5 %, due in 2 years)
32,400
Land
172,000
Accounts Payable
Common Stock
16,500
237,000
Retained Earnings
73,800
Totals
$331,200
$331,200
During January 2024, the following transactions occur:
January 1 Purchase equipment for $21,200. The company estimates a residual value of $3,200 and a four-year service
life.
January 4 Pay cash on accounts payable. $11,200.
January 8 Purchase additional inventory on account, $99,900.
January 15 Receive cash on accounts receivable, $23,700.
January 19 Pay cash for salaries, $31,500.
January 28 Pay cash for January utilities, $18,200.
January 30 Firework sales for January total $237,000. All of these sales are on account. The cost of the units sold is
$123,500.
Information for adjusting entries:
a. Depreciation on the equipment for the month of January is calculated using the straight-line method.
b. The company records an adjusting entry for $5,560 for estimated future uncollectible accounts.
c. The company has accrued interest on notes receivable for January.
d. Unpaid salaries owed to employees at the end of January are $34,300.
e. The company accrued income taxes at the end of January $10,700.
3. Prepare an adjusted trial balance as of January 31, 2024.
Accounts
Cash
TNT FIREWORKS
Adjusted Trial Balance
January 31, 2024
Accounts Receivable
Allowance for Uncollectible Accounts
Inventory
Notes Receivable
Land
Equipment
Accounts Payable
Debit
Credit
$
2,000
241,700
S
9,460
46,300
32,400
172,000
21,200
105,200
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