Question

4. Prepare a multiple-step income statement for the period ended January 31, 2021. TNT FIREWORKS Multiple-Step Income Statement For the month ended January 31, 2021 Expenses Total Operating Expenses

Answer 1

As per policy, only 4 parts of a question is allowed to answer at a time, so answering 5 parts here for you:

1) Journal entries:
Date	Accounts Titles	debit $	credit $
1-Jan-21	Equipment	21400
	Cash		21400
	(being purchase of equipment)
4-Jan-21	Accounts payable	11400
	Cash		11400
	(payment to creditors)
8-Jan-21	Inventory	101900
	Accounts payable		101900
	(being purchase of inventory on account)
15-Jan-21	Cash	23900
	Accounts Receivable		23900
	(cash received from debtors)
19-Jan-21	Salaries expense	31700
	Cash		31700
	(payment of salaries)
28-Jan-21	Utilities expense	18400
	Cash		18400
	(payment for utilities)
30-Jan-21	Accounts Receivable	239000
	Sales revenues		239000
	(sales on credit)
	COGS	124500
	Inventories		124500
	(being cost of sales booked)
2) ADJUSTMENT ENTERIES:
31-Jan-21	Depreciation exp.	300		(21400-3400)/(5*12)
	Acc. Dep. - equip		300
	(depreciation on equipment booked)
31-Jan-21	Allowance for Uncollectible accounts	2450		(4900*50%)
	Accounts Receivable		2450
	(being written down of uncollectible accounts)
	Bad Debts	5593.5		(28800-23900+239000-2450)*3% - (4100-2450)
	Allowance for Uncollectible accounts		5593.5
	(being booking bad debts)
31-Jan-21	Interest receivable	145		(34800*5%/12)
	Interest revenue		145
	(being interest revenue booked)
31-Jan-21	Salaries expense	34500
	Salaries payable		34500
	(being salaries payable booked)
31-Jan-21	Income tax exp.	10900
	Income tax payable		10900
	(income tax made payable)

3) Adjusted Trial Balance:
Accounts Titles	debit $	credit $	Calculation
Cash	1600		(60600-21400-11400+23900-31700-18400)
AR	241450		(28800-23900+239000-2450)
Allow for Uncoll. A/cs		7243.5	(4100-2450+5593.50)
Inventory	15600		(38200+101900-124500)
Notes Rece.	34800
Land	174000
AP		107200	(16700-11400+101900
Common Stock		239000
RE		76600
Equipment	21400
Salaries exp.	66200		(31700+34500)
Utilities exp.	18400
Sales revenue		239000
COGS	124500
Depreciation exp.	300
Acc. Dep. - equip		300
Bad Debts	5593.5
Interest receivable	145
Interest revenue		145
Salaries payable		34500
Income tax payable		10900
Income tax expense	10900
Total	714888.5	714888.5

4) Income Statement:
	Amount $
Sales revenue	239000
Interest revenue	145
total income	239145
Less:COGS	124500
Gross Profit	114645
Less: Expenses:
salaries	66200
Utilities	18400
Dep.	300
Bad debts	5593.5
total expenses	90493.5
Income before taxes	24151.5
Less:taxes	10900
Net Income	13251.5
5) Balance Sheet:
Assets:	Amount $
Cash	1600
AR	241450
Allow for Uncoll. A/cs	-7243.5
Inventory	15600
Interest receivable	145
Current Assets	251551.5
Notes Rece.	34800
Land	174000
Equipments	21400
Less:Acc.Dep.	-300
Total Assets	481451.5
Liabilities & SH Equity:	Amount $
Acc. Payable	107200
Salaries payable	34500
Income tax payable	10900
Current liabilities	152600
SH. Eq.:
Common Stock	239000
RE	76600
add:Net Income	13251.5
Total Liabilities & SH Eq.	481451.5