Question

Cullumber Company's balance sheet at December 31, 2021, is presented below. Cullumber Company Balance Sheet December 31, 2021 Cash $13,300 Accounts payable $9,520 Accounts receivable 19,300 Common stock 19,900 Allowance for doubtful accounts (840) Retained earnings 11,430 Inventory 9,090 $40,850 $40,850 During January 2022, the following transactions occurred. Cullumber uses the perpetual inventory method. Jan. 1 Cullumber accepted a 4-month, 8% note from Betheny Company in payment of Betheny's $6,000 account. 3 Cullumber wrote off as uncollectible the accounts of Walter Corporation ($400) and Drake Company ($300). 8 Cullumber purchased $15,530 of inventory on account. 11 Cullumber sold for $26,400 on account inventory that cost $17,530. 15 Cullumber sold inventory that cost $720 to Jack Rice for $900. Rice charged this amount on his Visa First Bank card. The service fee charged Cullumber by First Bank is 3%. 17 Cullumber collected $23,600 from customers on account. 21 Cullumber paid $16,130 on accounts payable. 24 Cullumber received payment in full ($300) from Drake Company on the account written off on January 3. 27 Cullumber purchased advertising supplies for $1,280 cash. 31 Cullumber paid other operating expenses, $3,170. Adjustment data:

Answer 1

1.

Cullumber Company Adjusted Trial Balance January 31, 2022
Account Titles	Debit	Credit
	$	$
Cash	16,593
Accounts Receivable	16,300
Allowance for Doubtful Accounts		978
Notes Receivable	6,000
Interest Receivable	40
Inventory	6,370
Advertising Supplies	540
Accounts Payable		8,920
Income Taxes Payable		1,385
Common Stock		19,900
Retained Earnings		11,430
Interest Revenue		40
Sales Revenue		27,300
Cost of Goods Sold	18,250
Operating EXpenses	3,170
Supplies Expense	740
Bad Debt Expense	538
Credit Card Expense	27
Income Tax Expense	1,385
Totals	$ 69,953	$ 69,953

2.

Cullumber Company Income Statement For the month ended January 31, 2022
Sales Revenue		$ 27,300
Cost of Goods Sold		18,250
Gross Profit		9,050
Operating Expenses
Other Operating Expenses	3,170
Supplies Expense	740
Bad Debt Expense	538
Credit Card Expense	27
Total Operating Expenses		4,475
Income from Operations		4,575
Interest Revenue		40
Income before Taxes		4,615
Income Tax Expense @ 30 %		1,385
Net Income		$ 3,230