Question

பானாரான Debit 58,900 25,400 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (51, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 36,500 14,400 157,000 15,000 222,000 52,800 $292,200 $292,200 During January 2021, the following transactions occur: January 1 Purchase equipment for $19,700. The company estimates a residual value of $1,700 and a five-year service life. January 4 Pay cash on accounts payable, $9,700. January 8 Purchase additional inventory on account, $84,900. January 15 Receive cash on accounts receivable, $22,200. January 19 Pay cash for salaries, $30,000. January 28 Pay cash for January utilities, $16, 700. January 30 Sales for January total $222,000. All of these sales are on account. The cost of the units sold is $116,000. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company estimates future uncollectible accounts. The company determines $3,200 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 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger) c. Accrued interest revenue on notes receivable for January d. Unpaid salaries at the end of January are $32,800. e. Accrued income taxes at the end of January are $9.200.

Answer 1

3.

TNT FIREWORKS
Adjusted Trial Balance
January 31,2021
Accounts	Debit	Credit
Cash	$5,000
Accounts receivable	$225,200
Allowance for uncollectible accounts		$8,260
Inventory	$5,400
Interest receivable	$60
Equipment	$19,700
Accumulated depreciation-Equipment		$300
Notes receivable	$14,400
Land	$157,000
Accounts payable		$90,200
Salaries payable		$32,800
Income tax payable		$9,200
Common stock		$222,000
Retained earnings		$52,800
Sales revenue		$222,000
Interest revenue [14,400 x 5%] x 1/12		$60
Cost of goods sold	$116,000
Salaries expense	$62,800
Utilities expense	$16,700
Depreciation expense [(19,700-1,700)/5] x 1/12	$300
Income tax expense	$9,200
Bad debt expense	$5,860
Total	$637,620	$637,620

4.

TNT FIREWORKS
Income statement
January 31,2021
Sales revenue		$222,000
Cost of goods sold		($116,000)
Cost of goods sold		$106,000
Operating expenses:
Salaries expense	$62,800
Utilities expense	$16,700
Depreciation expense	$300
Income tax expense	$9,200
Bad debt expense	$5,860
Total operating expenses		$94,860
Operating income		$11,140
Non-operating income(expense):
Interest revenue		$60
Net income		$11,200

5.

TNT FIREWORKS
Balance sheet
January 31,2021
Assets		Liabilities
Current assets:		Current liabilities:
Cash	$5,000	Accounts payable	$90,200
Accounts receivable	$225,200	Salaries payable	$32,800
Allowance for uncollectible accounts	($8,260)	Income tax payable	$9,200
Inventory	$5,400	Total current liabilities	$132,200
Interest receivable	$60
Total current assets	$227,400
Notes receivable	$14,400
Property,plant, and equipment:		Stockholder's equity:
Land	$157,000	Common stock	$222,000
Equipment	$19,700	Retained earnings (52,800+11,200)	$64,000
Accumulated depreciation-Equipment	($300)	Total stockholder's equity	$286,000
Property,plant, and equipment-net	$176,400
Total assets	$418,200	Total liabilities and stockholder's equity	$418,200

Closing entries:

Date	Account title and explanation	Debit	Credit
Dec 31	Sales revenue	$222,000
	Interest revenue	$60
	Income summary		$222,060
	[To close revenue accounts]
Dec 31	Income summary	$210,860
	Cost of goods sold		$116,000
	Salaries expense		$62,800
	Utilities expense		$16,700
	Depreciation expense		$300
	Income tax expense		$9,200
	Bad debt expense		$5,860
	[To close expenses accounts]
Dec 31	Income summary [210860-222060]	$11,200
	Retained earnings		$11,200
	[To close income summary account]

Calculations:

Uncollectibles = ($3,200 x 50%) + (Total accounts receivable - $3,200) x 3% = $8,260

Allowance for uncollectible accounts
		Beg.	$2,400
		Bad debt expense (balance figure)	$5,860
		End.	$8,260