Answer:
TNT Fireworks
1. Adjusting Entries on January 31:
Accounts Debit Credit
a. Depreciation Expense $375
Accumulated Depreciation $375
b. Uncollectible Expense $5,620
Allowance for Uncollectible Accounts $5,620
c. Accrued interest revenue $120
Interest Revenue $120
d. Salaries Expense $34,000
Salaries payable $34,000
e. Income Tax Expense $10,400
Income tax payable $10,400
2. Adjusted Trial Balance as of January 31, 2021:
Accounts Debit Credit
Cash $ 2,600
Accounts Receivable 238,400
Allowance for Uncollectible Accounts $9,220
Inventory 12,600
Notes Receivable
(5%, due in 2 years) 28,800
Land 169,000
Equipment 20,900
Accumulated Depreciation 375
Depreciation Expense 375
Salaries Expense 65,200
Utilities Expense 17,900
Income Tax Expense 10,400
Uncollectible Expense 5,620
Accounts Payable 102,200
Salaries Payable 34,000
Income Taxes Payable 10,400
Common Stock 234,000
Retained Earnings 69,600
Sales Revenue 234,000
Interest Revenue 120
Accrued Interest
Receivable 120
Cost of Goods Sold 122,000
Total $693,925 $693,915
3. Multi-step Income Statement for the period ended January 31, 2021:
Sales Revenue 234,000
Cost of goods sold 122,000
Gross profit $112,000
Interest Revenue 120
Total revenue $112,120
Depreciation Expense 375
Salaries Expense 65,200
Utilities Expense 17,900
Uncollectible Expense 5,620 $89,095
Income before tax $23,025
Income Tax Expense 10,400
Net Income $12,625
Retained Earnings, January 1 69,600
Retained Earnings, January 31 $82,225
4. Classified Balance Sheet as of January 31, 2021:
Assets:
Cash $ 2,600
Accounts Receivable 238,400
Uncollectible Accounts 9,220 229,180
Accrued Interest Receivable 120
Inventory 12,600
Current assets $244,500
Notes Receivable
(5%, due in 2 years) 28,800
Land 169,000
Equipment 20,900
Accumulated Dep. 375 20,525 218,325
Total assets $462,825
Liabilities:
Accounts Payable 102,200
Salaries Payable 34,000
Income Taxes Payable 10,400 $146,600
Equity:
Common Stock 234,000
Retained Earnings 82,225 $316,225
Total liabilities and Equity $462,825
5. Closing Journal Entries:
Accounts Debit Credit
Income Summary $221,495
Depreciation Expense 375
Salaries Expense 65,200
Utilities Expense 17,900
Income Tax Expense 10,400
Uncollectible Expense 5,620
Cost of Goods Sold 122,000
To close temporary accounts to the income summary.
Sales Revenue 234,000
Interest Revenue 120
Income Summary $234,120
To close temporary accounts to the income summary.
Cash $ 2,600
Accounts Receivable 238,400
Inventory 12,600
Notes Receivable
(5%, due in 2 years) 28,800
Accrued Interest
Receivable 120
Land 169,000
Equipment 20,900
Allowance for Uncollectible Accounts $9,220
Accumulated Depreciation 375
Accounts Payable 102,200
Salaries Payable 34,000
Income Taxes Payable 10,400
Common Stock 234,000
Retained Earnings 82,225
To close permanent accounts to the balance sheet.
Explanation:
a) Data and Calculations:
Accounts Debit Credit
Cash $ 60,100
Accounts Receivable 27,800
Allowance for
Uncollectible Accounts $ 3,600
Inventory 37,700
Notes Receivable
(5%, due in 2 years) 28,800
Land 169,000
Accounts Payable 16,200
Common Stock 234,000
Retained Earnings 69,600
Totals $ 323,400 $ 323,400
See workings attached.
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