Journal Entries $-$ Problem $10-4($Algo$)$ Comprehensive problem $($LO$10-2,10-3,10-4,10-5)$

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On January $1,2026,$ the general ledger of Grand Finale Fireworks includes the following account balances:

AccountsDebitCreditCash$ $43,300$Accounts Receivable$45,700$Supplies$8,100$Equipment$70,000$Accumulated Depreciation$$$ $9,600$Accounts Payable$15,200$Common Stock, $$1$ par value$16,000$Additional Paid$-$in Capital$86,000$Retained Earnings$40,300$Totals$ $167,100$$ $167,100$

During January $2026,$ the following transactions occur:

January $2$Issue an additional $2,000$ shares of $$1$ par value common stock for $$40,000.$January $9$Provide services to customers on account, $$16,100.$January $10$Purchase additional supplies on account, $$5,500.$January $12$Purchase $1,300$ shares of its own common stock for $$19$ per share.January $15$Pay cash on accounts payable, $$17,100.$January $21$Provide services to customers for cash, $$49,700.$January $22$Receive cash on accounts receivable, $$17,200.$January $29$Declare a cash dividend of $$0\mathrm{.}40$ per share to all shares outstanding on January $29.$ The dividend is payable on February $15.($Hint: Grand Finale Fireworks had $16,000$ shares outstanding on January $1,2026,$ and dividends are not paid on repurchased stock.$)$January $30$Resell $800$ shares of stock purchased on January $12$ for $$21$ per share.January $31$Pay cash for salaries during January, $$42,600.$

Problem $10-4($Algo$)$ Part $4$

$4.$ Prepare an income statement for the period ended January $31,2026.$

Unpaid utilities for the month of January are $$6,800.$

Supplies at the end of January total $$5,700.$

Depreciation on the equipment for the month of January is calculated using the straight$-$line method. At the time the equipment was purchased, the company estimated a service life of $3$ years and a residual value of $$10,600.$

Accrued income taxes at the end of January are $$2,600.$