Question

On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances: Credit Debit $ 26,900 15,109 $ 3,800 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Supplies Notes Receivable (6%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 4,000 19,000 80,400 8,700 99,000 33,900 $145,400 $145,400 During January 2021, the following transactions occur January 2 Provide services to customers for cash, $50, 100. January 6 Provide services to customers on account, $87,400. January 15 Write off accounts receivable as uncollectible, $3,500. January 20 Pay cash for salaries, $32,900. January 22 Receive cash on accounts receivable, $85,000.

Answer 1

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3D Family Fireworks
Workings
Accounts Receivable	Amount $
Opening Balance	15,100.00	A
Services on account	87,400.00	B
Accounts written off	(3,500.00)	C
Cash received	(85,000.00)	D
Closing Balance	14,000.00	E=A+B+C+D
Uncollectible out of above
20% of 4,400	880.00	F
5% of balance i.e. 9,600	480.00	G
Allowance for Uncollectible accounts	1,360.00	H=F+G
Bad debt expense
Opening Allowance for Uncollectible accounts	3,800.00	I
Less: Accounts written off	3,500.00	See C
Allowance for Uncollectible accounts (before adjustment)	300.00	J=I-C
Allowance for Uncollectible accounts on 31 Jan, 2021	1,360.00	See H
Bad debt expense	1,060.00	K= H-J
Supplies Expense	Amount $
Openings Supplies	4,000.00
Less: Closing Supplies	700.00
Supplies Expense	3,300.00
Interest Receivable on Note	Amount $
Amount	19,000.00	L
Annual interest rate	6%	M
Annual interest amount	1,140.00	N=L*M
Monthly interest amount	95.00	O=N/12
Revenue	Amount $
Cash	50,100.00
Credit	87,400.00
Total Revenue	137,500.00
Salaries Expense	Amount $
Paid in Jan	32,900.00
Unpaid for Jan	35,000.00
Salaries Expense	67,900.00
Income Statement	Amount $	Amount $
Revenue	137,500.00
Interest Revenue	95.00
Total Revenue		137,595.00
Expenses
Salaries Expense	67,900.00
Supplies Expense	3,300.00
Utilities Expense	15,200.00
Bad debt expense	1,060.00
Total Expenses		87,460.00
Net Profit		50,135.00