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:
  

  
During January 2018, the following transactions occur:

January 2. Sold gift cards totaling $8,000. The cards are redeemable for merchandise within one year of the purchase date.
January 6. Purchase additional inventory on account, $147,000.
January 15. Firework sales for the first half of the month total $135,000. All of these sales are on account. The cost of the units sold is $73,800.
January 23. Receive $125,400 from customers on accounts receivable.
January 25. Pay $90,000 to inventory suppliers on accounts payable.
January 28. Write off accounts receivable as uncollectible, $4,800.
January 30. Firework sales for the second half of the month total $143,000. Sales include $11,000 for cash and $132,000 on account. The cost of the units sold is $79,500.

5. Prepare a classified balance sheet as of January 31, 2018.

6. Record closing entries.

  Accounts Debit Credit   Cash $ 25,100   Accounts Receivable 46,200   Allowance for Uncollectible Accounts $ 4,200   Inventory 20,000   Land 46,000   Equipment 15,000   Accumulated Depreciation 1,500   Accounts Payable 28,500   Notes Payable (6%, due April 1, 2019) 50,000   Common Stock 35,000   Retained Earnings 33,100        Totals $ 152,300 $ 152,300

Explanation / Answer

Date General Journal Debit Credit January 02 Cash 8000 Deferred revenue 8000 January 06 Inventory 147000 Accounts payable 147000 January 15 Accounts Receivable 135000 Sales revenue 135000 January 15 Cost of goods sold 73800 Inventory 73800 January 23 Cash 125400 Accounts Receivable 125400 January 25 Accounts payable 90000 Cash 90000 January 28 Allowances for uncollectible accounts 4800 Accounts receivable 4800 January 15 Cash 11000 Accounts Receivable 132000 Sales revenue 143000 January 15 Cost of goods sold 79500 Inventory 79500 Assets Amount Liability and equity shareholders fund Amount   Cash 79500   Accumulated Depreciation 1500   Accounts Receivable 183000   Accounts Payable 85500   Allowance for Uncollectible Accounts 600 Deferrec revenue 8000   Inventory 13700   Notes Payable (6%, due April 1, 2019) 50000   Land 46000   Common Stock 35000   Equipment 15000   Retained Earnings 157800 337800 337800

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