On January 1, 2018, the general ledger of ACME Fireworks includes the following
ID: 2575403 • Letter: O
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.
January 31. Pay cash for monthly salaries, $52,000.
1. 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 $3,000 and a two-year service life.
2. At the end of January, $11,000 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.
3. Accrued interest expense on notes payable for January.
4. Accrued income taxes at the end of January are $13,000.
5. By the end of January, $3,000 of the gift cards sold on January 2 have been redeemed.
Need journal entries for the following 5.
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 $ 152,300Explanation / Answer
Jan 2 debit:Cash. 8000
Credit:Deferred revenue. 8000
jan 6- debit: Inventory. 1,47,000
Credit: Account payable. 1,47,000
Jan 15- debit: Accounts receivable. 1,35,000
Credit: Sales revenue 1,35,000
Jan 23-debit: Cash. 1,25,400
Credit: Accounts receivable. 1,25,400
Jan 30- debit: Cash 11,000
Debit: Accounts receivable 1,32,000
Credit: Sales revenue. 1,43,000
Jan 30- debit: Cost of goods sold. 79,500
Credit: Inventory. 79,500
Jan 31 Debit: Salaries expenses 52,000
Credit: Cash 52,000
2-
Debit: Jan 31- Depreciation expenses 500
Credit: Accumulated depreciation. 500
Jan 31
Debit: Bad debts expenses. 12,500
Credit: Allowance for un collectable account. 12,500
Jan31- debit: Interest expenses. 250
Credit: Interest payable. 250
Jan 31-debit: Income tax expenses. 13,000
Credit: Income tax payable 13,000
Jan 31- debit: Deferred revenue 3,000
Credit: Sales 3,000
Depreciation for January (15,000-3000)/24=500
2- un collection accounts
(11,000*30%)+(1,72,000*5%)+600=12,500
1,72,000=46,200+1,35,000-1,25,400-4800+1,32,000-11,000
600=4800-4200
3- Interes expenses 50,000*6%=1/2=250
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