Question

Saved Help Save & E Chec $ 25,209 46,400 $ 4,309 20,109 899 Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2022) Common Stock Retained Earnings Totals 16,099 1,600 28,600 51,009 36,000 33.209 $154,700 4,700 During January 2021, the following transactions occur January 2 Sold gift cards totaling $8,200. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional Inventory on account, $148,000. January 15 Firework sales for the first half of the month total $136,000. All of these sales are on account. The cost of the units sold is $74,300. January 23 Receive $125,500 from customers on accounts receivable. January 25 Pay $91,000 to Inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $4,900. January 30 Firework sales for the second half of the month total $144,000. Sales Include $10,000 for cash and $134,000 on account. The cost of the units sold is $80,000. January 31 Pay cash for monthly salaries, $52,100. The following information is available on January 31. a Denreciation on the e inment for the month of lantarvis Calculated in the straint.line method At the time the e inment was < Prey 10 of 10 !!! Next QA earch O Rie e

Answer 1

ACME Fireworks Journal entries Date Account 2-Jan Cash Gift Card Liability/Unearned Revenue Credit Calculation Debit $ 8,200 $ 8,200 $ 148,000 6-Jan Inventory Accounts Payable $ 148,000 $ 136,000 15-Jan Accounts Receivable Sales $ 136,000 $ 74,300 15-Jan Cost of goods sold Inventory $ 74,300 $ 125,500 23-Jan Cash Accounts Receivable $ 125,500 $ 91,000 25-Jan Accounts Payable Cash $ 91,000 $ 4,900 28-Jan Allowance for uncollectible accounts Accounts Receivable $ 4,900 30-Jan Cash Accounts Receivable Sales $ 10,000 $ 134,000 $ 144,000 $ 80,000 30-Jan Cost of goods sold Inventory $ 80,000 $ 52,100 $ 52,100 31-Jan Salaries expense Cash Adjusting entries 31-Jan Depreciation expense Accumulated Depreciation 525 = (16,000-3,400)/2*1/12 $ 525 $ 11,160 Workings below 31-Jan Bad debts expense Allowance for uncollectible accounts $ 11,160 $ 255 =51,000*6%*1/12 31-Jan Interest expense Interest Payable $ 255 $ 13,100 31-Jan Income tax expense Income tax Payable $ 13,100 $ 3,100 $ 3,100 31-Jan Gift Card Liability/Unearned Revenue Sales Closing entries 31-Jan Sales Retained Earnings $ 283,100 $ 283,100 $ 231,440 31-Jan Retained Earnings Cost of goods sold Salaries expense Depreciation expense Bad debts expense Interest expense Income tax expense $ 154,300 $ 52,100 $ 525 $ 11,160 $ 255 $ 13,100 Workings Allowance - Adjusted Balance Past due Not Past due Totals Accts Rec $ 12,000 $174,000 $ 186,000 Uncollectible accounts 30% $ 3,600 4% $ 6,960 10,560 Allowance for uncollectible accounts Opening balance Write off Unadjusted Balance Adjusted Balance Bad debts expense $ 4,300 $ (4,900) $ (600) $ 10,560 $ 11,160 =10,560+600

T Accounts Date Debit Date Credit Cash Op bal $ 25,200 25-Jan $ 91,000 2-Jan $ 8,200 31-Jan $ 52,100 23-Jan $125,500 30-Jan $ 10,000 Date Debit Date Credit Accounts Receivable Op bal $ 46,400 15-Jan $ 136,000 23-Jan $ 125,500 30-Jan $ 134,000 28-Jan $ 4,900 Date Debit Date Credit Date Debit Date Credit Allowance for uncollectible accounts Inventory 28-Jan $ 4,900 Op bal $ 4,300 Op bal $ 20,100 31-Jan $ 11,160 6 -Jan $ 148,000 15-Jan $ 74,300 30-Jan $ 80,000 Bal. Bal. $ 25,800 Land $ 47,000 $186,000 Equipment $ 16,000 Bal. $ 10,560 Accumulated Depreciation Op bal $1,600 31-Jan $ 525 Bal. $ 13,800 Accounts Payable Op bal $ 28,600 25-Jan $ 91,000 6-Jan $ 148,000 Op bal Op bal Bal. $ 2,125 Bal. $ 47,000 Gift Card Liability/Unearned Revenue 31-Jan $ 3,100 2-Jan $ 8,200 $ 16,000 Notes Payable Op bal Bal. Interest Payable 31-Jan Bal. $ 85,600 Income tax Payable 31-Jan $ 13,100 $ 51,000 $ 255 $ 5,100 $ 51,000 Bal. $ 255 Bal. $ 13,100 Bal. Common Stock Op bal Bal. Retained Earnings Op bal $ 36,000 $ 33,200 $ 33,200 Bal. $ 36,000 Sales 15-Jan $136,000 30-Jan $144,000 31-Jan $ 3,100 Bal. Cost of goods sold 15-Jan $ 74,300 30-Jan $ 80,000 Salaries expense 31-Jan $ 52,100 Depreciation expense 31-Jan $ 525 $ 283,100 Bal. Bal. $ 525 Bal. Bad debts expense 31-Jan $ 11,160 $ 154,300 Interest expense $ 255 Bal. $ 52,100 Income tax expense 31-Jan $ 13,100 31-Jan Bal. $ 11,160 Bal. $ 255 Bal. $ 13,100

ACME Fireworks Account Names Cash Accounts Receivable Allowance for uncollectible accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Gift Card Liability/Unearned Revenue Interest Payable Income tax Payable Notes Payable (6%, due April 1, 2022) Common Stock Retained Earnings Sales Cost of goods sold Salaries expense Depreciation expense Bad debts expense Interest expense Income tax expense Totals Adjusted TB Debit Credit 25,800 186,000 10,560 13,800 47,000 16,000 2,125 85,600 5,100 255 13,100 51,000 36,000 33,200 283,100 154,300 52,100 525 11,160 255 13,100 520,040 520,040

283,100 154,300 128,800 ACME Fireworks Income Statement For period ended January 31, 2021 Sales Cost of goods sold Gross Profit Operating Expenses Salaries expense Depreciation expense Bad debts expense Total Operating Expenses Operating Income Other items Interest expense Net Income before taxes Income tax expense Net Income 52,100 525 11,160 63,785 65,015 255 64,760 13,100 51,660 Statement of Retained Earnings For period ended January 31, 2021 Retained Earnings, Jan 1, 2021 Net Income Retained Earnings, Jan 31, 2021 33,200 51,660 84,860

ACME Fireworks Balance Sheet As of Jan 31, 2021 Assets Current Assets Cash Accounts Receivable Allowance for uncollectible accounts Inventory Total Current Assets Liabilities & Stockholders Equity Current Liabilities 25,800 Accounts Payable 186,000 Gift Card Liability/Unearned Revenue (10,560) Interest Payable 13,800 Income tax Payable 215,040 Total Current Liabilities 85,600 5,100 255 13,100 104,055 51,000 Non-Current Assets Land Equipment Accumulated Depreciation Total Non-Current Assets Non-Current Liabilties 47,000 Notes Payable (6%, due April 1, 2022) 16,000 (2,125) 60,875 Total Liabilties 155,055 Stockholders Equity Common Stock Retained earnings Total Stockholders Equity 36,000 84,860 120,860 Total Assets 275,915 Total Liabilities & Stockholders Equity 275,915