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 Crede $ 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 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. 3 4. 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 191 b. The company calculates that estimated future uncollectible acounts are $3,300 using the accounts receivable aging method (Hint: this method does consider the balance C in the allowance account in calculating the adjustment!) The company accrues interest on notes payable for January. Interest is expected to be paid each December 31. d The company accrues income taxes at the end of January of $10,300. Prepare an adjusted trial balance as of January 31, 2024, after updating beginning balances (above) for transactions during January (Requirement 1) and adjusting entries at the end of January 1 (Requirement 2) [Note: a worksheet is provided and the trial balance there counts for this] Prepare an income statement for the period ended January 31, 2024 Prepare a classified balance sheet as of January 31, 2024 6. Record the closing entries 7 Prepare a post-closing trial balance (Cathy added) GENERAL LEDGER ACCOUNT: Cash ACCOUNT NO: 101 POST BALANCE DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT 2024 Jan Balance V 32,500.00 ACCOUNT: Accounts Receivable. ACCOUNT NO: 111 ITEM POST REF BALANCE DEBIT CREDIT DEBIT CREDIT DATE 2024 Jan 1 Balance 26,000.00 ACCOUNT Allowance for Uncollectible accounts ACCOUNT NO: 115 POST BALANCE ITEM REF. DEBIT CREDIT DEBIT CREDIT DATE 2024 Jan 1 Balance ACCOUNT: Inventory DATE 2024 Jan Balance ACCOUNT: Land DATE 2024 Jan 4 Balance ACCOUNT 1.800.00 ACCOUNT NO 121 ITEM POST REF. BALANCE DEBIT CREDIT DEBIT CREDIT 40,000.00 ACCOUNT NO: 141 ITEM POST REF BALANCE DEBIT CREDIT DEBIT CREDIT 55,000.00 Accounts Payable DATE 2024 Jan 1 Balance ACCOUNT NO 201 ITEM POST REF BALANCE DEBIT CREDIT DEBIT CREDIT 32,400.00 ACCOUNT Notes Payable (4%, due in 3 years) DATE ITEM 2024 Jan 1 Balance ACCOUNT: Interest Payable DATE ACCOUNT NO 211 POST BALANCE REF DEBIT CREDIT DEBIT CREDIT 30,000.00 ACCOUNT NO: 231 POST BALANCE ITEM REF DEBIT CREDIT DEBIT CREDIT ACCOUNT Income Taxes Payable ACCOUNT NO: 241 POST BALANCE DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT ACCOUNT Common Stock ACCOUNT NO 301 DATE ITEM POST REF BALANCE DEBIT CREDIT DEBIT CREDIT 2024 Jan 1 Balance 56.000.00 ACCOUNT: Retained Earnings ITEM POST REF. ACCOUNT NO: BALANCE 311 DEBIT CREDIT DEBIT CREDIT DATE 2024 Jan Balance ACCOUNT Sales Revenue DATE v 33,300.00 ACCOUNT NO 401 ITEM POST REF BALANCE DEBIT CREDIT DEBIT CREDIT ACCOUNT: Cost of Goods sold ACCOUNT NO 501 DATE ITEM POST REF. BALANCE DEBIT CREDIT DEBIT CREDIT ACCOUNT Salaries Expense DATE ACCOUNT NO: 511 ITEM POST REF BALANCE DEBIT CREDIT DEBIT CREDIT ACCOUNT: Retained Earnings ACCOUNT NO: 311 POST BALANCE DATE 2024 Jan Balance ITEM REF. DEBIT CREDIT DEBIT CREDIT v 33,300.00 ACCOUNT: Sales Revenue DATE ACCOUNT NO: 401 POST BALANCE ITEM REF DEBIT CREDIT DEBIT CREDIT ACCOUNT Cost of Goods sold ACCOUNT NO: 501 DATE ITEM POST REF BALANCE DEBIT CREDIT DEBIT CREDIT ACCOUNT Salaries Expense DATE ACCOUNT NO: 511 ITEM POST REF BALANCE DEBIT CREDIT DEBIT CREDIT ACCOUNT Bad Debt Expense ACCOUNT NO: 521 DATE ITEM POST REF BALANCE DEBIT CREDIT DEBIT CREDIT ACCOUNT Interest Expense DATE ACCOUNT DATE ACCOUNT NO 531 ITEM POST REF BALANCE DEBIT CREDIT DEBIT CREDIT Income Tax Expense ACCOUNT NO 541 POST BALANCE ITEM DEBIT CREDIT DENT CREDIT ACCOUNT NAME Onh Accounts Receivable Allowance for collect me Tas Prystle Falle (yea) 15 De 20 E B W Work For the month ended lanuary 11, 2014 DE TRAL BALANCE CREDIT ADSTMENTS CREDIT ADIUSTED THAL BALANCE CRECIE INCOME STATEMENT BALANCE SHEET DEBIT CREDIT DEB CREDIT