Question

Scroll down for transaction from begginging of month

Journal entry worksheet < 0..... 6 ... 5 0 14 10 14 Unpaid salaries at the end of January are $28,100. Prepare the adjusting entry for salaries. Note: Enter debits before credits. Date Account Title | Debit Credit Jan 31 Record entry Clear entry View general journal
On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances:

Answer 1

Freedom Fireworks Journal Enteries Date Particulars 1.1.2021 Cash a/c Dr. To Note Payable (Note Payable issued) Debit in $ Credit in $ 120000 120000 33000 4.1.2021 Cash a/c Dr. To Accounts Receivable (Cash received from debtors) 33000 Dr. 31000 10.1.2021 Accounts Payable a/c To Cash (Creditors paid off) 31000 Dr. 30900 15.1.2021 Salaries Expense a/c To Cash (Salaries paid in cash) 30900 67000 139000 Dr. 30.1.2021 Cash a/c Dr. Accounts Receivable a/c To Sales (Sales made) 206000 122500 Cost of goods sold a/c To Inventory (To record cost of goods sold) 122500 1765 500 31.1.2021 Note Payable a/c Dr. Interest Expense a/c Dr. To Cash (First installment paid) 120000 x 5% x 1/12 = 500 2265

Adjusting Enteries Date Particulars 31.1.2021 Depreciation Expense - Build a/c Dr. To Accum. Depre - Build (Depreciation charged to building) (140000 - 26000) / 10 = 11400/12 = 950 Debit in $Credit in $ 950 950 31.1.2021 Bad Debts a/c Dr. 1480 To Allowance for Uncollectible accounts 1480 (Bad debts estimated) 5000 / 2 = 2500 + 2780 = 5280 - 3800 = 1480 (144000 - 5000) = 139000 x 2% = 2780 28100 31.1.2021 Salaries Expense a/c Dr. To Salaries Payable (Salary expense accrued) 28100 Dr. 10000 31.1.2021 Income Tax Expense a/c To Income Tax Payable (Income tax accrued) 10000 Closing Enteries Date Particulars 31.1.2021 Income Summary a/c Dr. To Cost of goods sold To Salaries Expense To Interest Expense To Depreciation Expense - Build To Bad Debts To Income Tax Expense (Expense accounts closed) Debit in $Credit in $ 194430 122500 59000 500 950 1480 10000 Dr. 206000 31.1.2021 Sales a/c To Income Summary (Revenue accounts closed) 206000 Dr. 11570 31.1.2021 Income Summary a/c To Retained Earnings (Profits Transferred) 11570

Worksheet For the month ending 31.1.2021 10000 Particulars Cash Accounts Receivable Allowance for Uncollectible accounts Inventory Land Buildings Accum. Depre - Build Accounts Payable Salaries Payable Income Tax Payable Note Payable Common Stock Retained Earnings Sales Cost of goods sold Salaries Expense Interest Expense Depreciation Expense - Build Bad Debts Income Tax Expense Totals Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 169035 169035 144000 144000 3800 1480 5280 31500 31500 87300 87300 140000 140000 11600 950 12550 8700 8700 28100 28100 10000 118235 118235 220000 220000 157400 157400 206000 206000 122500 122500 30900 28100 59000 500 500 950 950 1480 1480 10000 10000 725735 725735 40530 40530 766265 766265

206000 122500 83500 Statement of Income For the month ending 31.1.2021 Sales Cost of goods sold Gross Profit Less: Salaries Expense Interest Expense Depreciation Expense - Build Bad Debts Income Tax Expense Net Income 59000 500 950 1480 10000 71930 11570 Statement of Retained Earnings For the month ending 31.1.2021 Beginning 157400 Net Income 11570 168970

Amounts in $ Amounts in $ Balance sheet As at 31.1.2021 Assets Amounts in $ Amounts in $ Liabilities Current Assets Current Liabilities Cash 169035 Accounts Payable Accounts Receivable 144000 Salaries Payable Allowance for Uncollect -5280 Income Tax Payable Inventory 31500 339255 Note Payable 8700 28100 10000 21757 68557 96478 Non Current Assets Land Buildings Accum. Depre - Build 140000 -12550 Non Current Liabilities Note Payable 87300 Shareholders Equity 127450 Common Stock Retained Earnings 554005 Total Liabilities & Equity 220000 168970 388970 554005 Total Assets