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 Accounts Debit Credit Cash $ 59,400 Accounts Receivable 26,400 Allowance for Uncollectible Accounts $ 2,900 Inventory 37,000 Notes Receivable (5%, due in 2 years) 20,400 Land 162,000 Accounts Payable 15,500 Common Stock 227,000 Retained Earnings 59,800 Totals $305,200 $305,200 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. 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. 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. $ 108,500 Multiple-Step Income Statement For the month ended January 31, Year 1 Sales Revenue $ 227,000 Cost of Goods Sold (118,500) Gross Profit Expenses Salaries Expense or 63,800 Utilities Expense Or 17,200 Depreciation Expense 250 Bad Debt Expense 3,490 OOO 84,740 Total Operating Expenses Operating Income 23,760 x Income before taxes Income Tax Expense Net Income 23,760 9,700 14,060 $ Red text Indicates no response was expected in a relati had calculation is incorrecten