Required information Exercise 7-21B Complete the accounting cycle using long-term asset transactions (LO7-4, 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 $ 59,400 26,400 $ 2,990 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 37,000 20,400 162,000 15,500 227,000 59,800 $305,200 $385,200 During January Year 1, the following transactions occur: January 1 Purchase equipment for $20,200. The company estimates a residual value of $2,200 and a six-year service life. January 4 Pay cash on accounts payable, $10,200. January 8 Purchase additional inventory on account, $89,900. January 15 Receive cash on accounts receivable, $22,700. January 19 Pay cash for salaries, $30,500. January 28 Pay cash for January utilities, $17,200. January 30 Sales for January total $227,000. All of these sales are on account. The cost of the units sold is $118,500. 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 $3,700 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 $33,300. e. Accrued income taxes at the end of January are $9,700. Exercise 7-21B Part 5 5. Prepare a classified balance sheet as of January 31, Year 1. (Deductible amounts should be indicated with a minus sign.) Balance Sheet January 31, Year 1 Assets Liabilities Accounts Payable $ 95,200 Cash Accounts Receivable Less: Accumulated Depreciation Equipment X $ 4,000 230,700 250 20,200 X 162,000 145,500 % 562,650 20,400 Land 95,200 Inventory Total Current Assets Notes Receivable Total Current Liabilities Stockholder's Equity Common Stock Retained Earnings 227,000 45,740 X Total Stockholders' Equity Total Assets 583,050 Total Liabilities and Stockholders' Equity *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted 272,740 $ 367,940