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Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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![On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances:
Accounts
Credit
Cash
Accounts Receivable
Allowance for Uncollectible Accounts
Inventory
Land
Accounts Payable
Notes Payable (68, due in 3 years)
Common Stock
Retained Earnings
Totals
Debit
$23,300
40,000
37,000
72,100
$172,400
The $37,000 beginning balance of inventory consists of 370 units, each costing $100. During January 2024, Big Blast
Fireworks had the following inventory transactions:
28,900
37,000
63,000
39,000
$172,400
January 3 Purchase 1,600 units for $168,000 on account ($105 each).
January 8 Purchase 1,700 units for $187,000 on account ($110 each).
$4,500
January 12 Purchase 1,800 units for $207,000 on account ($115 each).
January 15 Return 135 of the units purchased on January 12 because of defects.
January 19 Sell 5,200 units on account for $780,000. The cost of the units sold is determined using a FIFO
perpetual inventory system.
< Prev
January 22 Receive $753,000 from customers on accounts receivable.
January 24 Pay $520,000 to inventory suppliers on accounts payable.
January 27 Write off accounts receivable as uncollectible, $3,200.
January 31 Pay cash for salaries during January, $121,000..
The following information is available on January 31, 2024.
a. 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.]
b. The company records an adjusting entry for $3,300 for estimated future uncollectible accounts.
c. The company accrues interest on notes payable for January. Interest is expected to be paid each December 31.
d. The company accrues income taxes at the end of January of $13,000.
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Transcribed Image Text:On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances:
Accounts
Credit
Cash
Accounts Receivable
Allowance for Uncollectible Accounts
Inventory
Land
Accounts Payable
Notes Payable (68, due in 3 years)
Common Stock
Retained Earnings
Totals
Debit
$23,300
40,000
37,000
72,100
$172,400
The $37,000 beginning balance of inventory consists of 370 units, each costing $100. During January 2024, Big Blast
Fireworks had the following inventory transactions:
28,900
37,000
63,000
39,000
$172,400
January 3 Purchase 1,600 units for $168,000 on account ($105 each).
January 8 Purchase 1,700 units for $187,000 on account ($110 each).
$4,500
January 12 Purchase 1,800 units for $207,000 on account ($115 each).
January 15 Return 135 of the units purchased on January 12 because of defects.
January 19 Sell 5,200 units on account for $780,000. The cost of the units sold is determined using a FIFO
perpetual inventory system.
< Prev
January 22 Receive $753,000 from customers on accounts receivable.
January 24 Pay $520,000 to inventory suppliers on accounts payable.
January 27 Write off accounts receivable as uncollectible, $3,200.
January 31 Pay cash for salaries during January, $121,000..
The following information is available on January 31, 2024.
a. 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.]
b. The company records an adjusting entry for $3,300 for estimated future uncollectible accounts.
c. The company accrues interest on notes payable for January. Interest is expected to be paid each December 31.
d. The company accrues income taxes at the end of January of $13,000.
17 18
5
19
***
22
of 24 ⠀⠀
Next >
![a. 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.]
b. The company records an adjusting entry for $3,300 for estimated future uncollectible accounts.
c. The company accrues interest on notes payable for January. Interest is expected to be paid each December 31.
d. The company accrues income taxes at the end of January of $13,000.
2. Record adjusting entries on January 31 for the above transactions. (If no entry is required for a transaction/event, select "No
Journal Entry Required" in the first account field.)
View transaction list](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F94509fc1-ed87-4c03-b211-1c62ccfffcaf%2F74932ed5-1f7e-44fb-97cc-f241478b09f2%2Fjz7wcjc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:a. 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.]
b. The company records an adjusting entry for $3,300 for estimated future uncollectible accounts.
c. The company accrues interest on notes payable for January. Interest is expected to be paid each December 31.
d. The company accrues income taxes at the end of January of $13,000.
2. Record adjusting entries on January 31 for the above transactions. (If no entry is required for a transaction/event, select "No
Journal Entry Required" in the first account field.)
View transaction list
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