Blossom Company’s balance sheet at December 31, 2021, is presented below. Blossom Company Balance Sheet December 31, 2021 Cash $13,600 Accounts payable $9,000 Accounts receivable 19,100 Owner’s capital 32,200 Allowance for doubtful accounts (900 ) Inventory 9,400 $41,200 $41,200 During January 2022, the following transactions occurred. Blossom uses the perpetual inventory method. Jan. 1 Blossom accepted a 4-month, 8% note from Merando Company in payment of Merando’s $1,200 account. 3 Blossom wrote off as uncollectible the accounts of Inwood Corporation ($400) and Goza Company ($300). 8 Blossom purchased $17,400 of inventory on account. 11 Blossom sold for $27,500 on account inventory that cost $17,700. 15 Blossom sold inventory that cost $800 to Mark Lauber for $1,400. Lauber charged this amount on his Visa First Bank card. The service fee charged Blossom by First Bank is 3%. 17 Blossom collected $21,800 from customers on account. No sales discounts were allowed. 21 Blossom paid $17,000 on accounts payable. No purchase discounts were taken. 24 Blossom received payment in full ($300) from Goza Company on the account written off on January 3. 27 Blossom purchased supplies for $1,450 cash. 31 Blossom paid other operating expenses, $3,000. Adjustment data: 1. Interest is recorded for the month on the note from January 1. 2. Uncollectibles are expected to be 6% of the January 31, 2022, accounts receivable. 3. A count of supplies on January 31, 2022, reveals that $400 remains unused. 1. Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual system.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) 2. Prepare an adjusted trial balance at January 31, 2022.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Blossom Company’s balance sheet at December 31, 2021, is presented below.

Blossom Company Balance Sheet December 31, 2021
Cash	$13,600		Accounts payable	$9,000
Accounts receivable	19,100		Owner’s capital	32,200
Allowance for doubtful accounts	(900	)
Inventory	9,400
	$41,200			$41,200

During January 2022, the following transactions occurred. Blossom uses the perpetual inventory method.

Jan. 1		Blossom accepted a 4-month, 8% note from Merando Company in payment of Merando’s $1,200 account.
3		Blossom wrote off as uncollectible the accounts of Inwood Corporation ($400) and Goza Company ($300).
8		Blossom purchased $17,400 of inventory on account.
11		Blossom sold for $27,500 on account inventory that cost $17,700.
15		Blossom sold inventory that cost $800 to Mark Lauber for $1,400. Lauber charged this amount on his Visa First Bank card. The service fee charged Blossom by First Bank is 3%.
17		Blossom collected $21,800 from customers on account. No sales discounts were allowed.
21		Blossom paid $17,000 on accounts payable. No purchase discounts were taken.
24		Blossom received payment in full ($300) from Goza Company on the account written off on January 3.
27		Blossom purchased supplies for $1,450 cash.
31		Blossom paid other operating expenses, $3,000.

Adjustment data:

1.		Interest is recorded for the month on the note from January 1.
2.		Uncollectibles are expected to be 6% of the January 31, 2022, accounts receivable.
3.		A count of supplies on January 31, 2022, reveals that $400 remains unused.

1. Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual system.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

2. Prepare an adjusted trial balance at January 31, 2022.

3. Prepare a multiple-step income statement for the month ending January 31, 2022.

4. Prepare an owner’s equity statement for the month ending January 31, 2022.

5. Prepare a classified balance sheet as of January 31, 2022. (List Current Assets in order of liquidity.)

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