Question

On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances: Credit Debit $ 25,700 14,500 $ 2,600 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Supplies Notes Receivable (6%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 3,400 29,000 77,900 9,600 105,000 33,300 $150,500 $150,500 During January 2021, the following transactions occur: January 2 Provide services to customers for cash, $44,100. January 6 Provide services to customers on account, $81,400. January 15 Write off accounts receivable as uncollectible, $2,200. January 20 Pay cash for salaries, $32,300. January 22 Receive cash on accounts receivable, $79,000. January 25 Pay cash on accounts payable, $6,400. January 30 Pay cash for utilities during January, $14,600. The following information is available on January 31, 2021. a. The company estimates future uncollectible accounts. The company determines $5,900 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.) b. Supplies at the end of January total $700. c. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31. d. Unpaid salaries at the end of January are $34,400.

1. Record each of the transactions listed above in the 'General Journal'
2. Record the adjusting entries in the 'General Journal' .
3. Review the adjusted 'Trial Balance' as of January 31, 2021
4. Prepare an income statement for the period ended January 31, 2021
5. Prepare a classified balance sheet as of January 31, 2021

Answer 1

6 Credit Debit 44100 7 Date Account Title & Explanation 2-Jan Cash Service Revenue (To record service revenue) 44100 81400 6-Jan Accounts Receivable Service Revenue (To record service revenue) 81400 15 2200 15-Jan Allowance for Ucollectible Accounts Accounts Receivable (To record uncollectible accounts) 2200 32300 20-Jan Salaries Expense Cash (To record salaries Expense) 32300 79000 22-Jan Cash Accounts Receivable (To record collection of receivable) 79000 6400 25-Jan Accounts Payable Cash (To record payment of accounts payable) 6400

14600 30-Jan Utilities Expense Cash (To record Utilities Expense) 14600 N w (Adjusting Entries) 1161 coa 31-Jan Bad Debt Expense Allowance for Ucollectible Accounts (To record bad debts) 1161 14500 2200 81400 79000 1180 (5900*20%) 381 2700 1 31-Jan Supplies Expense Supplies (To record supplies) 3400-700 2700 2200 2600 1161 1561 5 - 145 31-Jan Interest Receivable (29000 *6% *1/12) Interest Revenue (o record interest revenue) 145 34400 NO CON 9 31-Jan Salaries Expense Salaries Payable (To record accrured salaries expense) 34400

Adjusted Trial Balance As on 31st January Debit Credit 95,500 145 14,700 1,561 700 29,000 77,900 Particulars Cash Interest Receivable Accounts Receivable Allowance for Uncollectible Accounts Supplies Notes Receivable Land Accounts Payable Salaries Payable Common Stock Retained Earnings Service Revenue Interest Revenue Salaries Expense Bad Debts Expense Utilities Expense Supplies Expense Total 3,200 34,400 105,000 33,300 125,500 145 66,700 1,161 14,600 2,700 303,106 303,106

Multiple Step Income Statement 125500 100 Multiple Step Income Statement Sales Revenue Less Operating expenses Salaries Expense Bad Debts Expense Utilities Expense Supplies Expense Total expenses Net Operating Income Other expenses and Gains Interest Revenue Net Income 66,700 1,161 14,600 2,700 104 85,161 40,339 107 108 109 145 40,484

112 113 114 115 116 Classified Balance Sheet Assets Current Assets Cash 95500 Interest Receivable 145 Accounts Receivable 14700 Allowance for Uncollectible Accounts -1561 Supplies 700 Total Current Assets Notes Receivable Property, Plant & Equipment Land Total Assets 117 118 109,484 29,000 120 77,900 216,384 3,200 34,400 126 37,600 Liabilities & Owner's Equity Accounts Payable Salaries Payable Total Liabilities Owner's Equity Common Stock Retained Earnings Total Liabilities & Owner's Equity 128 129 105000 73,784 178,784 216,384 131