Exercise 9-21 Complete the accounting cycle using long-term liability transactions (LO9-2, 9-8) [The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances: Accounts Debit Credit Cash $ 13,000 Accounts Receivable 37,600 Inventory 153,800 Land 85,300 Buildings 138,000 Allowance for Uncollectible Accounts Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Totals $427,700 $ 3,600 11,400 37,500 218,000 157, 200 $427,700 During January 2021, the following transactions occur: January Borrow $118,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures 1 in 5 years. Payments of $2,281 are required at the end of each month for 60 months. January Receive $32,800 from customers on accounts receivable. 4 January Pay cash on accounts payable, $29,000. 10 January Pay cash for salaries, $30,700. 15 January Firework sales for the month total $210,600. Sales include $66,800 for cash and $143,800 on account. The cost 30 of the units sold is $121,500. January Pay the first monthly installment of $2,281 related to the $118,000 borrowed on January 1. Round your interest 31 calculation to the nearest dollar.

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Q: Define Accounts payable.

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Q: Define each of the following terms:e. Purchase accounting

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A: Financial statements refer to structured records in a proper format that conveys the performance and…

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Q: State the meaning of Receipt and Payment Account.

A: Receipt and Payment Account: Receipt and payment Account is a summary of Cash book. Only…

Q: Define net pay.

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Q: What is a functional expense statement?

A: The answer is explained as follows:

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A: Explain the basic features of Income and Expenditure Account and of Receipt and Payment Account.

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Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.