Answer:
ACME Fireworks
Income Statement for the period ended January 31, 2021
Sales revenue $292,000
Cost of goods sold 160,360
Gross profit $131,640
Operating expenses:
Salaries 52,700
Bad debts expense 600 53,300
Net income $78,340
Explanation:
a) Data and Calculations:
ACME Fireworks
Accounts Debit Credit
Cash $25,800
Accounts Receivable 47,600
Allowance for Uncollectible Accounts $4,900
Inventory 20,700
Land 53,000
Equipment 18,500
Accumulated Depreciation 2,200
Accounts Payable 29,200
Notes Payable (68, due April 1, 2022) 57,000
Common Stock 42,000
Retained Earnings 30,300
Totals $165,600 $165,600
Inventory
Account Titles Debit Credit
Beginning balance 20,700
Accounts payable 154,000
Cost of goods sold $77,300
Cost of goods sold 83,000
Sales
Account Titles Debit Credit
Accounts receivable $142,000
Cash 15,000
Accounts receivable 135,000
Income summary $292,000
Cost of goods sold
Account Titles Debit Credit
Inventory $77,360
Inventory 83,000
Income summary $160,360
Salaries $52,700
Allowance for Uncollectible Accounts
Account Titles Debit Credit
Beginning balance $4,900
Bad Debts expense 600
Ending balance $5,500
Transaction Analysis:
January 2 Cash $9,400 Gift Cards Liability $9,400
January 6 Inventory $154,000 Account payable $154,000
January 15 Accounts receivable $142,000. Sales revenue $142,000
Cost of the units sold $77,300 Inventory $77,300
January 23 Cash $126,100 Accounts receivable $126,100
January 25 Accounts payable $97,000 Cash $97,000
January 28 Uncollectible Allowance $5,500 Accounts receivable $5,500
January 30 Cash $15,000 Accounts receivable $135,000 Sales revenue $150,000
Cost of the units sold $83,000 Inventory $83,000
January 31 Salaries expense $52,700 Cash $52,700
