On January 1, 2024, the general ledger of ACME Fireworks includes the following account balances:
Accounts Debit Credit
Cash $26,000
Accounts Receivable 48,000
Allowance for Uncollectible Accounts $5,100
Inventory 20,900
Land 55,000
Equipment 19,500
Accumulated Depreciation 2,400
Accounts Payable 29,400
Notes Payable (6%, due April 1, 2025) 59,000
Common Stock 44,000
Retained Earnings 29,500
Totals $169,400 $169,400
During January 2024, the following transactions occur:
January 2 Sold gift cards totaling $9,800. The cards are redeemable for merchandise within one year of the purchase date.
January 6 Purchase additional inventory on account, $156,000. ACME uses the perpetual inventory system.
January 15 Firework sales for the first half of the month total $144,000. All of these sales are on account. The cost of the units sold is $78,300.
January 23 Receive $126,300 from customers on accounts receivable.
January 25 Pay $99,000 to inventory suppliers on accounts payable.
January 28 Write off accounts receivable as uncollectible, $5,700.
January 30 Firework sales for the second half of the month total $152,000. Sales include $12,000 for cash and $140,000 on account. The cost of the units sold is $84,000.
January 31 Pay cash for monthly salaries, $52,900.
The following information is available on January 31.
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 $3,900 and a two-year service life.
The company records an adjusting entry for $12,000 for estimated future uncollectible accounts.
The company has accrued interest on notes payable for January.
The company has accrued income taxes at the end of January of $13,900.
By the end of January, $3,900 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold).
