E6-21 PLEASE NOTE THAT THE NUMBERS IN THIS EXERCISE ARE DIFFERENT THAN IN THE TEXT!!! On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Cash Debit $ Credit 32,500 Accounts Receivable 26,000 Allowance for Uncollectible Accounts $ 1,800 Inventory 40,000 Land 55,000 Accounts Payable 32,400 Notes Payable (4%, due in 3 years) 30,000 Common stock 56,000 Retained Earnings 33,300 Totals $ 153,500 $ 153,500 The $40,000 beginning balance of inventory cosists of 400 units, each costing $100. During January 2024, Big Blast Fireworks had the following inventory transactions: During January 2024, the following transactions occur: January 3 January 8 January 12 January 15 January 19 Purchase 1,150 units for $120,750 on account ($105 each) Purchase 1,250 units for $137,500 on account ($110 each) Purchase 1,400 units for $161,000 on account ($115 each) Return 100 of the units purchased on January 12 because of defects. Sell 4,000 units on account for $600,000. The cost of the units sold is determined by using a FIFO perpetual inventory system. January 22 Receive $565,000 from customers on accounts receivable. January 24 Pay $410,000 to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $2,500. January 31 Pay cash for salaries during January, $118,000 Required: 1. Record each of the transactions listed above. 2. Record adjusting entries on January 31. a. At the end of January, the the company estimates that the remaining units of inventory purchased on January 12 are expected to sell in February for only $100 each. Prepare the adjusting entry using the lower of cost and net realizable value method. [Hint: Determine the number of units remaining from January 12 afer subtracting the units retuned on January 15 and the units assumed sold (FIFO) on January 19.] Required: 1. 2. Record each of the transactions listed above. Record adjusting entries on January 31. a. b. C. At the end of January, the the company estimates that the remaining units of inventory purchased on January 12 are expected to sell in February for only $100 each. Prepare the adjusting entry using the lower of cost and net realizable value method. [Hint: Determine the number of units remaining from January 12 afer subtracting the units retuned on January 15 and the units assumed sold (FIFO) on January 19.] The company calculates that estimated future uncollectible acounts are $3,300 using the accounts receivable aging method (Hint: this method does consider the balance in the allowance account in calculating the adjustment!) The company accrues interest on notes payable for January. Interest is expecteed to be paid each December 31. d. The company accrues income taxes at the end of January of $10,300