On January 1, Year 1, the general ledger of a company includes the following account balances:AccountsDebitCreditCash60,500 Accounts Receivable28,600 Allowance for Uncollectible Accounts 4,000Inventory38,100 Notes Receivable (5%, due in 2 years)33,600 Land173,000 Accounts Payable 16,600Common Stock 238,000Retained Earnings 75,200Totals333,800333,800During January Year 1, the following transactions occur: January 1 Purchase equipment for $21,300. The company estimates a residual value of $3,300 and a six-year service life.January 4 Pay cash on accounts payable, $11,300.January 8 Purchase additional inventory on account, $100,900.January 15 Receive cash on accounts receivable, $23,800.January 19 Pay cash for salaries, $31,600.January 28 Pay cash for January utilities, $18,300.January 30 Sales for January total $238,000. All of these sales are on account. The cost of the units sold is $124,000.Information for adjusting entries:Depreciation on the equipment for the month of January is calculated using the straight-line method.The company estimates future uncollectible accounts. The company determines $4,800 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.)Accrued interest revenue on notes receivable for January.Unpaid salaries at the end of January are $34,400.Accrued income taxes at the end of January are $10,800Prepare Closing Entries

The question is related to Closing entires for year 1 of 31st January month. The balances as on 1…

Answered: Prepare Closing Entries

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, Year 1, the general ledger of a company includes the following account balances:

Accounts	Debit	Credit
Cash	60,500
Accounts Receivable	28,600
Allowance for Uncollectible Accounts		4,000
Inventory	38,100
Notes Receivable (5%, due in 2 years)	33,600
Land	173,000
Accounts Payable		16,600
Common Stock		238,000
Retained Earnings		75,200
Totals	333,800	333,800

During January Year 1, the following transactions occur:

January	1	Purchase equipment for $21,300. The company estimates a residual value of $3,300 and a six-year service life.
January	4	Pay cash on accounts payable, $11,300.
January	8	Purchase additional inventory on account, $100,900.
January	15	Receive cash on accounts receivable, $23,800.
January	19	Pay cash for salaries, $31,600.
January	28	Pay cash for January utilities, $18,300.
January	30	Sales for January total $238,000. All of these sales are on account. The cost of the units sold is $124,000.

Information for adjusting entries:

Depreciation on the equipment for the month of January is calculated using the straight-line method.
The company estimates future uncollectible accounts. The company determines $4,800 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.)
Accrued interest revenue on notes receivable for January.
Unpaid salaries at the end of January are $34,400.
Accrued income taxes at the end of January are $10,800

Prepare Closing Entries

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