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

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[The following information applies to the questions displayed below.] On January 1, Year 1, the general ledger of a company includes the following account balances:

Accounts	Debit				Credit
Cash	$	59,200
Accounts Receivable		26,000
Allowance for Uncollectible Accounts					$	2,700
Inventory		36,800
Notes Receivable (5%, due in 2 years)		18,000
Land		160,000
Accounts Payable						15,300
Common Stock						225,000
Retained Earnings						57,000
Totals	$	300,000			$	300,000

During January Year 1, the following transactions occur:

January		1		Purchase equipment for $20,000. The company estimates a residual value of $2,000 and a four-year service life.
January		4		Pay cash on accounts payable, $10,000.
January		8		Purchase additional inventory on account, $87,900.
January		15		Receive cash on accounts receivable, $22,500.
January		19		Pay cash for salaries, $30,300.
January		28		Pay cash for January utilities, $17,000.
January		30		Sales for January total $225,000. All of these sales are on account. The cost of the units sold is $117,500.

Information for adjusting entries:

1. Depreciation on the equipment for the month of January is calculated using the straight-line method.
2. The company estimates future uncollectible accounts. The company determines $3,500 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
3. Accrued interest revenue on notes receivable for January.
4. Unpaid salaries at the end of January are $33,100.
5. Accrued income taxes at the end of January are $9,500.

rev: 11_22_2018_QC_CS-148298, 06_13_2019_QC_CS-170054

Exercise 7-21B Part 2

2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select particular "No Journal Entry Required" in the first account field.)

Required information Exercise 7-21B Complete the accounting cycle using long-term asset transactions (L07-4, 7-7) [The following information applies to the questions displayed below.) On January 1, Year 1, the general ledger of a company includes the following account balances: Credit Debit $ 59,200 26,000 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) $ 2,700 36,800 18,000 160,000 Land Accounts Payable Common Stock Retained Earnings Totals 15, 300 225,000 57,000 $300,000 $ 300,000 During January Year 1, the following transactions occur: January 1 Purchase equipment $20,000. The company estimates residual value of $2,000 and a four-yea service life. January 4 Pay cash on accounts payable, $10,000. January 8 Purchase additional inventory on account, $87,900. January 15 Receive cash on accounts receivable, $22,500. January 19 Pay cash for salaries, $30, 300. January 28 Pay cash for January utilities, $17,000. January 30 Sales for January total $225,000. All of these sales are on account. The cost of the units sold is $117,500. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company estimates future uncollectible accounts. The company determines $3,500 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest revenue on notes receivable for January. d. Unpaid salaries at the end of January are $33,100. e. Accrued income taxes at the end of January are $9,500. Exercise 7-21B Part 2 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select particular "No Journal Entry Required" in the first account field.) X Answer is not complete. No Date General Journal Debit Credit 1 January 31 Depreciation Expense Accumulated Depreciation 2 January 31 Bad Debt Expense Allowance for Uncollectible Accounts 3 January 31 Interest Receivable Interest Revenue 4 January 31 Salaries Expense Salaries Payable 5 January 31 9,500 Income Tax Expense Income Tax Payable 9,500