Question

On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances:

Accounts	Debit				Credit
Cash	$	26,900
Accounts Receivable		15,100
Allowance for Uncollectible Accounts					$	3,800
Supplies		4,000
Notes Receivable (6%, due in 2 years)		19,000
Land		80,400
Accounts Payable						8,700
Common Stock						99,000
Retained Earnings						33,900
Totals	$	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.
January		25		Pay cash on accounts payable, $7,000.
January		30		Pay cash for utilities during January, $15,200.

The following information is available on January 31, 2021.

1. The company estimates future uncollectible accounts. The company determines $4,400 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
2. Supplies at the end of January total $700.
3. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31.
4. Unpaid salaries at the end of January are $35,000.

I need help completing the general ledger, income statement, balance sheet, and analysis please.

Answer 1

3D Family Fireworks Journal Enteries Date Particulars 2.1.2021 Cash a/c Dr. To Service Revenue (Services provided for cash) Debit in $ Credit in $ 50100 50100 87400 6.1.2021 Accounts Receivable a/c Dr. To Service Revenue (Services provided on account) 87400 3500 15.1.2021 Allowance for uncollectible accounts To Accounts Receivable (Uncollectibles written off) 3500 Dr. 32900 20.1.2021 Salary Expense a/c To Cash (Salary paid in cash) 32900 85000 22.1.2021 Cash a/c Dr. To Accounts Receivable (Cash received from debtors) 85000 7000 25.1.2021 Accounts Payable a/c Dr. To Cash (Creditors paid) 7000 Dr. 15200 30.1.2021 Utilities Expense a/c To Cash (Utilities paid in cash) 15200

Adjusting Enteries Date Particulars Debit in $ Credit in $ 31.1.2021 Bad Debts a/c Dr. 1060 To Allowance for uncollectible accounts 1060 (Bad debts estimated ) 4400 x 20% = 880 + 480 = 1360 - 300 = 1060 15100 + 87400 - 3500-85000 - 4400 = 9600 x 5% = 480 Allowance for Uncollectibles = 3800 - 3500 = 300 3300 31.1.2021 Supplies Expense a/c Dr. To Supplies (Supplies Expensed ) 4000 - 700 = 3300 3300 31.1.2021 Interest Receivable a/c Dr. To Interest Income (Interest Revenue accrued) 19000 x 6% x 1/12 = 95 95 Dr. 35000 31.1.2021 Salary Expense a/c To Salary Payable (Salary accrued) 35000

Worksheet For the period ending 31.1.2021 95 Particulars Cash Accounts Receivable Allowance for uncollectible accounts Interest Receivable Supplies Notes Receivable 6% Land Accounts Payable Salary Payable Common Stock Retained Earnings Service Revenue Interest Income Salary Expense Utilities Expense Bad Debts Supplies Expense Totals Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 106900 106900 14000 14000 300 1060 1360 95 4000 3300 700 19000 19000 80400 80400 1700 1700 35000 35000 99000 99000 33900 33900 137500 137500 95 32900 35000 67900 15200 15200 1060 1060 3300 3300 272400 272400 39455 39455 308555 308555 95

137500 137595 Statement of Income For the period ending 31.1.2021 Service Revenue Interest Income Total Revenue Less: Salary Expense 67900 Utilities Expense 15200 Bad Debts 1060 Supplies Expense 3300 Net Income 87460 50135 Statement of Retained Earnings For the period ending 31.1.2021 Beginning 33900 Net Income 50135 84035

Amounts in $ Amounts in $ Balance sheet As at 31.1.2021 Assets Current Assets Cash Accounts Receivable Allowance for uncollectible accounts Interest Receivable Supplies Amounts in $ Amounts in $ Liabilities Current Liabilities 106900 Accounts Payable 14000 Salary Payable -1360 1700 35000 36700 95 700 120335 Non Current Assets Notes Receivable 6% Shareholders Equity 19000 Common Stock 80400 Retained Earnings 219735 Total Liabilities & Equity 99000 84035 Land 183035 219735 Total Assets Receivables Turnover = Service Revenue / Avg. Receivables = 137500/(15100 - 3800 + 14000 - 1360)/2 = 137500 /11970 = 11.49 Days in Receivables = 365 / 11.49 = 31.77 Days Industry details not provided so comparison not possible Ratio of allowance for uncollectibles to Accounts Receivable 1.1.2021 = 3800 / 15100 = 25.17% 31.1.2021 = 1360 / 14000 = 9.71% Company is improving.