On January 1, 2024, the general ledger of Freedom Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Buildings Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Totals Debit $ 13,100 Credit 37,800 $ 3,700 153,900 86,300 139,000 11,500 38,600 219,000 157,300 $ 430,100 $ 430,100 During January 2024, the following transactions occur: January 1 January 4 Borrow $119,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $2,301 are required at the end of each month for 60 months. Receive $32,900 from customers on accounts receivable. January 10 Pay cash on accounts payable, $30,000. January 15 Pay cash for salaries, $30,800. January 30 Firework sales for the month total $210,800. The cost of the units sold is $122,000. January 31 Pay the first monthly installment of $2,301 related to the $119,000 borrowed on January 1. The following information is available on January 31, 2024. a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $27,400. b. The company estimates additional future uncollectible accounts of $1,628. c. Unpaid salaries at the end of January are $28,000. d. Accrued income taxes at the end of January are $9,900. e. The portion of Notes Payable (long-term) due within the next 12 months is reclassified as Notes Payable (current). The amount of the reclassification is $21,145.
On January 1, 2024, the general ledger of Freedom Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Buildings Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Totals Debit $ 13,100 Credit 37,800 $ 3,700 153,900 86,300 139,000 11,500 38,600 219,000 157,300 $ 430,100 $ 430,100 During January 2024, the following transactions occur: January 1 January 4 Borrow $119,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $2,301 are required at the end of each month for 60 months. Receive $32,900 from customers on accounts receivable. January 10 Pay cash on accounts payable, $30,000. January 15 Pay cash for salaries, $30,800. January 30 Firework sales for the month total $210,800. The cost of the units sold is $122,000. January 31 Pay the first monthly installment of $2,301 related to the $119,000 borrowed on January 1. The following information is available on January 31, 2024. a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $27,400. b. The company estimates additional future uncollectible accounts of $1,628. c. Unpaid salaries at the end of January are $28,000. d. Accrued income taxes at the end of January are $9,900. e. The portion of Notes Payable (long-term) due within the next 12 months is reclassified as Notes Payable (current). The amount of the reclassification is $21,145.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 13GI
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Transcribed Image Text:On January 1, 2024, the general ledger of Freedom Fireworks includes the following account balances:
Accounts
Cash
Accounts Receivable
Allowance for Uncollectible Accounts
Inventory
Land
Buildings
Accumulated Depreciation
Accounts Payable
Common Stock
Retained Earnings
Totals
Debit
$ 13,100
Credit
37,800
$ 3,700
153,900
86,300
139,000
11,500
38,600
219,000
157,300
$ 430,100
$ 430,100
During January 2024, the following transactions occur:
January 1
January 4
Borrow $119,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and
matures in 5 years. Payments of $2,301 are required at the end of each month for 60 months.
Receive $32,900 from customers on accounts receivable.
January 10 Pay cash on accounts payable, $30,000.
January 15 Pay cash for salaries, $30,800.
January 30 Firework sales for the month total $210,800. The cost of the units sold is $122,000.
January 31 Pay the first monthly installment of $2,301 related to the $119,000 borrowed on January 1.
The following information is available on January 31, 2024.
a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was
purchased, the company estimated a service life of 10 years and a residual value of $27,400.
b. The company estimates additional future uncollectible accounts of $1,628.
c. Unpaid salaries at the end of January are $28,000.
d. Accrued income taxes at the end of January are $9,900.
e. The portion of Notes Payable (long-term) due within the next 12 months is reclassified as Notes Payable (current). The amount of the
reclassification is $21,145.
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