Exercise 7-21 Complete the accounting cycle using long-term asset transactions (LO7-2, 7-4, 7-7)

[The following information applies to the questions displayed below.] On January 1, 2018, the general ledger of TNT Fireworks includes the following account balances:

Accounts	Debit			Credit
Cash	$	58,800
Accounts Receivable		25,200
Inventory		36,400
Notes Receivable (5%, due in 2 years)		13,200
Land		156,000
Allowance for Uncollectible Accounts					2,300
Accounts Payable					14,900
Common Stock					221,000
Retained Earning					51,400
Totals	$	289,600		$	289,600

During January 2018, the following transactions occur: January 1. Purchase equipment for $19,600. The company estimates a residual value of $1,600 and a six-year service life. January 4. Pay cash on accounts payable, $9,600. January 8. Purchase additional inventory on account, $83,900. January 15. Receive cash on accounts receivable, $22,100 January 19. Pay cash for salaries, $29,900. January 28. Pay cash for January utilities, $16,600. January 30. Firework sales for January total $221,000. All of these sales are on account. The cost of the units sold is $115,500.

1. Record each of the transactions listed above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Exercise 7-21 Part 2

1. Depreciation on the equipment for the month of January is calculated using the straight-line method. 2. At the end of January, $3,100 of accounts receivable are past due, and the company estimates that 50% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 2% will not be collected. The note receivable of $20,100 is considered fully collectible and therefore is not included in the estimate of uncollectible accounts. 3. Accrued interest revenue on notes receivable for January. 4. Unpaid salaries at the end of January are $32,700. 5. Accrued income taxes at the end of January are $9,100 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)