Answer:
TNT Fireworks
a. Multiple-step Income Statement for the period ended January 31, 2021:
Sales revenue                         $220,000
Cost of goods sold                     115,000
Gross profit                              $105,000
Interest Revenue                                50
Expenses:
Depreciation exp.      3,600
Salaries expense    62,400
Utilities expense     16,500
Bad debt expense   5,900      $88,400
Income before tax                   $16,650
Income taxes exp                        9,000
Net income                                $7,650
Beginning Retained Earnings  50,000
Ending Retained earnings     $57,650
b. Classified Balance Sheet as of January 31, 2021:
Assets
Current assets:
Cash                              $5,400
Accounts Receivable 223,000
Allowance for
 Uncollectible Accounts (8,100)
Interest Receivable             50
Inventory                        4,200    $224,550
Long-term assets
Notes Receivable (5%,
 due in 2 years)           12,000
Land                          155,000
Equipment                  19,500
Depreciation               (3,600)     $182,900
Total assets                                $407,450
Liabilities and equity
Current liabilities:
Accounts Payable                        $88,200
Salaries payable                            32,600
Income taxes payable                     9,000
Total liabilities                            $129,800
Equity:
Common Stock                        $220,000
Retained Earnings                        57,650
Total equity                              $277,650 
Total liabilities and equity       $407,450
c. Closing Entries:
Accounts                       Debit      Credit
Sales revenue        $220,000
Interest Revenue               50
Income summary                     $220,050
To close sales and interest revenue to the income summary.
Income Summary  $212,400
Cost of goods sold                   $115,000
Depreciation exp.                          3,600
Salaries expense                        62,400
Utilities expense                         16,500
Bad debt expense                       5,900
Income taxes exp                        9,000
To close cost of goods sold and expenses to the income summary.
Income summary     $7,650
Retained earnings                   $7,650
To close the net income to the retained earnings.
Explanation:
a) Data and Calculations:
Account Balances:
Accounts                       Debit      Credit
Cash                          $58,700
Accounts Receivable 25,000
Allowance for
 Uncollectible Accounts             $2,200
Inventory                   36,300
Notes Receivable (5%,
 due in 2 years)         12,000
Land                        155,000
Accounts Payable                       14,800
Common Stock                       220,000
Retained Earnings                    50,000
Totals                  $287,000 $287,000
Analysis of Transactions:
January 1 Equipment $19,500  Cash $19,500 
January 4 Accounts payable, $9,500 Cash $9,500
January 8 Inventory $82,900 Accounts payable $82,900
January 15 Cash $22,000 Accounts receivable, $22,000
January 19 Salaries expense $29,800 Cash $29,800
January 28 Utilities expense, $16,500 Cash $16,500
January 30 Accounts receivable $220,000 Sales revenue $220,000
Cost goods sold $115,000 Inventory $115,000
Accounts                       Debit      Credit
Cash                          $58,700 - 19,500 -9,500 +22,000 - 29,800 - 16,500
= $5,400
Accounts Receivable 25,000 - 22,000 + 220,000 = 223,000
Interest Receivable           50
Allowance for
 Uncollectible Accounts             $2,200 + 5,900 = 8,100
Inventory                   36,300 + 82,900 - 115,000 = 4,200
Notes Receivable (5%,
 due in 2 years)         12,000
Land                        155,000
Equipment                19,500
Accumulated depreciation          3,600
Accounts Payable                       14,800 - 9,500 + 82,900 = 88,200
Salaries payable                        32,600
Income Taxes Payable                9,000
Common Stock                       220,000
Retained Earnings                    50,000
Sales revenue                        220,000
Interest Revenue                             50
Cost of goods sold 115,000
Depreciation exp.      3,600
Salaries expense    29,800 + 32,600 = 62,400
Utilities expense     16,500
Bad debt expense   5,900
Income Taxes          9,000  
Totals                  $287,000 $287,000
Adjusting entries:
Depreciation expenses $3,600 Accumulated depreciation $3,600
Allowance for Uncollectible Accounts = $1,500
Allowance for uncollectible accounts = $6,600 ($220,000 * 3%)
Total allowance for uncollectible = $8,100 ($1,500 + $6,600)
Bad debts expense $ 5,900 Allowance for Uncollectible $5,900
Interest Receivable $50 Interest Revenue = $50 ($12,000 * 5% * 1/12)
Salaries Expense $32,600 Salaries payable $32,600
Income Taxes $9,000 Income Taxes Payable $9,000
Adjusted Trial Balance
As of January 31, 2021
Accounts                       Debit      Credit
Cash                              $5,400
Accounts Receivable 223,000
Interest Receivable             50
Allowance for
 Uncollectible Accounts               $8,100
Inventory                        4,200
Notes Receivable (5%,
 due in 2 years)           12,000
Land                          155,000
Equipment                  19,500
Accumulated depreciation          3,600
Accounts Payable                      88,200
Salaries payable                        32,600
Income taxes payable                 9,000
Common Stock                       220,000
Retained Earnings                    50,000
Sales revenue                        220,000
Interest Revenue                             50
Cost of goods sold 115,000
Depreciation exp.      3,600
Salaries expense    62,400
Utilities expense     16,500
Bad debt expense   5,900
Income taxes exp    9,000
Totals                 $631,550 $631,550