Question

Help Save $ 59,500 26,600 $ 3.009 Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 37,100 21,600 163.000 15,600 228,000 61,289 $307,880 $307,800 During January 2021, the following transactions occur January 1 Purchase equipment for $20,300. The company estimates a residual value of $2,300 and a five-year service life. January 4 Pay cash on accounts payable, $10,300. January 8 Purchase additional inventory on account, $99,900. January 15 Receive cash on accounts receivable, $22,880. January 19 Pay cash for salaries, $30,600. January 28 Pay cash for January utilities, $17,300. January 30 Sales for January total $228,000. All of these sales are on account. The cost of the units sold is $119,000. The following information is available on January 31, 2021 a. Depreciation on the equipment for the month of January is calculated using the straight-line method b. At the end of January, $3,800 of accounts receivable are past due, and the company estimates that 50% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 2% will not be collected. The note receivable of $21,600 is considered fully collectible and therefore is not included in the estimate of uncollectible accounts. c. Accrued interest revenue on notes receivable for January d. Unpaid salaries at the end of January are $33,400. < Prev 10 of 10 Next o e @ 9 search

Answer 1

Credit Calculation Journal entries Date Account 1-Jan Equipment Cash Debit 20,300 20,300 10,300 4-Jan Accounts Payable Cash 10,300 90,900 8-Jan Inventory Accounts Payable 90,900 22,800 15-Jan Cash Accounts Receivable 22,800 30,600 19-Jan Salaries expense Cash 30,600 17,300 28-Jan Utilities Expense Cash 17,300 228,000 228,000 30-Jan Accounts Receivable Sales Revenue Cost of goods sold Inventory 119,000 119,000 Req 2 Adjusting entries 31-Jan Depreciation expense Accumulated Depreciation-Equipment 300 =(20,300-2,300)/5*1/12 300 3,460 Workings below 31-Jan Bad debts expense Allowance for Uncollectible Accounts 3,460 90 =21,600*5%*1/12 31-Jan Accrued Interest Revenue Interest Revenue 33,400 31-Jan Salaries expense Salaries Payable 33,400 9,800 9,800 31-Jan Income tax expense Income tax Payable Reg 6 Closing entries 31-Jan Sales Revenue Interest Revenue Retained Earnings 228,000 90 228,090 213,860 31-Jan Retained Earnings Cost of goods sold Salaries expense Utilities Expense Depreciation expense Bad debts expense Income tax expense 119,000 64,000 17,300 300 3,460 9,800 Wkgs Bad debts expense Accounts Receivable Past due Not past due Total Accts Rec 3,800 228,000 231,800 Ucollectible % Uncollectible Amount 50% 1,900 4,560 6,460 2% Allowance for Uncollectible Accounts Adjusted Ending Balance Beginning Balance Bad debts expense 6,460 3,000 3,460

Credit T Accounts Date Debit Date Credit Date Debit Date Cash Accounts Receivable Op bal $ 59,500 1-Jan $ 20,300 Op bal $ 26,600 15-Jan 15-Jan $ 22,800 4-Jan $ 10,300 30-Jan $ 228,000 19-Jan $ 30,600 28-Jan $ 17,300 Date Debit Date Credit Date Debit Date Credit Allowance for Uncollectible Accounts Inventory Op bal $3,000 Op bal $ 37,100 | 31-Jan $ 3,460 8 -Jan $ 90,900 30-Jan $119,000 $ 22,800 Bal. $ 3,800 Accrued Interest Revenue 31-Jan $ 90 Bal. $231,800 Notes Receivable (5%, due in 2 years) Op bal $ 21,600 Bal. Land $163,000 $ 6,460 Bal. $ 9,000 Equipment 1-Jan $ 20,300 Op bal Bal. Bal. Bal $ 90 Accumulated Depreciation Equipment 31-Jan $ 300 Bal. $ 21,600 Accounts Payable 4-Jan $ 10,300 Op bal $ 15,600 8-Jan $ 90,900 $ 163,000 Salaries Payable 31-Jan $ 20,300 Income tax Payable 31-Jan $ $ 33,400 9,800 $ 300 $ 96,200 Bal. $33,400 $ 9,800 Bal. Common Stock Op bal Bal. Retained Earnings Op bal $228,000 $ 61,200 Bal. $ 228,000 $ 61,200 Sales Revenue 30-Jan Bal. Cost of goods sold 30-Jan $ 119,000 $ 228,000 Interest Revenue 31-Jan $ 90 Salaries expense 19-Jan $ 30,600 31-Jan $ 33,400 $228,000 Bal. $ Bal. Utilities Expense 28-Jan $ 17,300 $ 119,000 Depreciation expense $ 300 Bal. Bad debts expense 31-Jan $ 3,460 90 Bal. $ 64,000 Income tax expense 31-Jan $ 9,800 31-Jan Bal. $ 17,300 Bal. $ 300 Bal. $ 3,460 Bal. $ 9,800

Unadjusted TB Debit Credit 3,800 231,800 3,000 9,000 21,600 163,000 20,300 Adjusted TB Debit Credit 3,800 231,800 6,460 9,000 90 21,600 163,000 20,300 300 96,200 33,400 9,800 228,000 61,200 228,000 119,000 Account Names Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Accrued Interest Revenue Notes Receivable (5%, due in 2 years) Land Equipment Accumulated Depreciation Equipment Accounts Payable Salaries Payable Income tax Payable Common Stock Retained Earnings Sales Revenue Cost of goods sold Interest Revenue Salaries expense Utilities Expense Depreciation expense Bad debts expense Income tax expense Totals 96,200 228,000 61,200 228,000 119,000 90 30,600 17,300 64,000 17,300 300 3,460 9,800 663,450 616,400 616,400 663,450

228,000 119,000 109,000 Income Statement For Month ended Jan 31, 2021 Revenues Sales Revenue Cost of goods sold Gross Profit Operating Expenses Salaries expense Utilities Expense Depreciation expense Bad debts expense Total Operating Expenses Operating Income Interest Revenue Net Income before taxes Income tax expense Net Income 64,000 17,300 300 3,460 85,060 23,940 90 24,030 9,800 14,230 Statement of Retained Earnings For Month ended Jan 31, 2021 Retained Earnings, Jan 1, 2021 Net Income Retained Earnings, Jan 31, 2021 61,200 14,230 75,430

Balance Sheet As of Jan 31, 2021 Assets Current Assets Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Accrued Interest Revenue Total Current Assets 3,800 231,800 (6,460) 225,340 9,000 90 238,230 163,000 Property, Plant & Equipment Land Equipment Accumulated Depreciation-Equipment Equipment, Net Total Property, Plant & Equipment 20,300 (300) 20,000 183,000 Other Assets Notes Receivable (5%, due in 2 years) Total Assets 21,600 442,830 Liabilities & Stockholders Equity Current Liabilities Accounts Payable Salaries Payable Income tax Payable Total Current Liabilities 96,200 33,400 9,800 139,400 Stockholders Equity Common Stock Retained Earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 228,000 75,430 303,430 442,830