On January 1, 2018, the general ledger of ACME Fireworks includes the following

Question

On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2019) Common Stock Retained Earnings Debit $ 27,000 50,000 $6,100 21,900 65,000 24,500 3,400 30,400 69,000 54,000 25,500 Totals $188,400 $188.400 During January 2018, the following transactions occur: January 2 Sold gift cards totaling $11,800. The cards are redeemable for merchandise within one year of the purchase date January 6 Purchase additional inventory on account, $166,000 January 15 Firework sales for the first half of the month total $154,000. All of these sales are on account. The cost of the units sold is $83,300 January 23 Receive $127,300 from customers on accounts receivable January 25 Pay $109,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,700 January 30 Firework sales for the second half of the month total $162,000. Sales include $10,000 for cash and $152,000 on account. The cost of the units sold is $89,000 January 31 Pay cash for monthly salaries, $53,900 The following information is available on January 31, 2018 a. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a residual value of S5,300 and a two-year service life b. At the end of January, $30,000 of accounts receivable are past due, and the company estimates that 30% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 5% will not be collected c. Accrued interest expense on notes payable for January. d. Accrued income taxes at the end of January are $14,900 e. By the end of January, $4,900 of the gift cards sold on January 2 have been redeemed General Journal Genera Ledger Income Trial Balance Statement Balance Sheet Analysis Requirement If no entry is required for a transaction/event, select "No journal entry required" in the first account field View transaction list View journal entry worksheet Date Account Title Debit Credit Jan 02 Cash 11,800 Deferred revenue 11,800 Jan 06 166,000 Accounts payable 166,000 Accounts receivable 154.000 Sales revenue 154,000 Cost of goods sold Inventory 83,300 83,300 Jan 23 Cash 127,300 Accounts receivable 127,300

Explanation / Answer

Account title Debit Credit 31-Jan Sales revene 320900 Retained earnings 320,900 31-Jan Retained earnings interest expense 345 Salaries expense 53,900 Bad debt expense 19,200 income tax expense 14,900 Depreciation expense 800 Cost of goods sold 172,300

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