Question

On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances: Credit Debit $ 12,800 37,200 153,600 83,300 136,000 Accounts Cash Accounts Receivable Inventory Land Buildings Allowance for Uncollectible Accounts Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Totals $ 3,400 11,200 35,300 216,000 157,000 $422,900 $422,900 During January 2021, the following transactions occur: January 1 Borrow $116,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $2,243 are required at the end of each month for 60 months. January 4 Receive $32,600 from customers on accounts receivable. January 10 Pay cash on accounts payable, $27,000. January 15 Pay cash for salaries, $30,500. January 30 Firework sales for the month total $210,200. Sales include $66,600 for cash and $143,600 on account. The cost of the units sold is $120,500. January 31 Pay the first monthly installment of $2,243 related to the $116,000 borrowed on January 1. Round your interest calculation to the nearest dollar. The following information is available on January 31, 2021. a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $25,600. b. The company estimates future uncollectible accounts. The company determines $4,600 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 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Unpaid salaries at the end of January are $27,700. d. Accrued income taxes at the end of January are $9,600. e. $20,612 of the long-term note payable balance will be paid over the next year.

I have the entirety of the question done correctly, I just need help preparing my closing statements that I posted pictures of (13 and 14). I provided the complete trial balance in case if that's of any assistance. Thank you so much for your help and let me know if you need any other information!

Answer 1

Closing entry for Revenue
Date	Particulars	Dr/Cr.	Dr ($)	Cr ($)
31-Jan-21	Cash A/c	Dr	66,600
	Accounts Receivable A/c	Dr	143,600
	To Sales A/c	Cr		210,200
	(Being Cash and Credit Sales recorded)
Closing entry for Expenses
15-Jan-21	Salaries Expense A/c	Dr	30,500
	To Cash A/c	Cr		30,500
	(Being Salaries paid in cash)
31-Jan-21	Interest Expense A/c	Dr	580
	To Cash A/c	Cr		580
	(Being Interest paid out of installment Refer Working 1)
31-Jan-21	Depreciation A/c	Dr	920
	To Accumulated Depreciation A/c	Cr		920
	(Being depreciation charged - Refer Working 2)
31-Jan-21	Bad Debts Expense A/c	Dr	2,300
	To Allowances for Uncollectible A/c	Cr		2,300
	(Being provision for bad debts created @ 50% of $4,600)
31-Jan-21	Bad Debts Expense A/c	Dr	2,872
	To Allowances for Uncollectible A/c	Cr		2,872
	(Being provision for bad debts created - Refer Working 3)
31-Jan-21	Salaries Expense A/c	Dr	27,700
	To Unpaid Salaries A/c	Cr		27,700
	(Being Salaries unpaid)
31-Jan-21	Income Tax Expense A/c	Dr	9,600
	To Income Tax Payable A/c	Cr		9,600
	(Being Income taxes accrued)
	Working Notes
1	Interest
	Loan	116,000
	Interest Rate	6%
	Month	1
	Interest = Loan*Rate*(1/12)	580
2	Depreciation
	Buliding Value	136,000
	Salvage Value	25,600
	Depreciable Value	110,400
	Life	10
	Annual Depreciation = Depreciable Value/ Life	11,040
	Monthly Depreciation = Annual Dep/12	920
3	Accounts Receivable
	Opening Balance	37,200
	Less: Payment received	(32,600)
	Add: Sales on credit	143,600
	Closing Balance	148,200
	Less: Accounts Receivable past due	(4,600)
	Remaining balance	143,600
	Provison @ 2% on above balance	2,872
	Thus,
	Closing Accounts Receivable	148,200
	Closing Allowances for doubtful debts	8,572
	(2872+2300+3400)