Required information Exercise 9-21 Complete the accounting cycle using long-term liability transactions (LO9-2, 9-8) [The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances: Credit Debit $ 11,600 34,800 152,400 71,300 124,000 Accounts Cash Accounts Receivable Inventory Land Buildings Allowance for Uncollectible Accounts Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Totals $ 2,200 10,000 22,100 204,000 155,800 $394,100 $394,100 During January 2021, the following transactions occur: January orrow $104,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures 1 in 5 years. Payments of $2,011 are required at the end of each month for 60 months. January Receive $31,400 from customers on accounts receivable. 4 January Pay cash on accounts payable, $15,000. 10 January Pay cash for salaries, $29,300. 15 January Firework sales for the month total $195,800. Sales include $65,400 for cash and $130,400 on account. The cost 30 of the units sold is $114,500. January Pay the first monthly installment of $2,011 related to the $104,000 borrowed on January 1. Round your interest 31 calculation to the nearest dollar. Exercise 9-21 Part 2 The following information is available on January 31, 2021. Exercise 9-21 Part 2 The following information is available on January 31, 2021. a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $24,400. b. The company estimates future uncollectible accounts. The company determines $3,400 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. Unpaid salaries at the end of January are $26,500. d. Accrued income taxes at the end of January are $8,400. e. $18,479 of the long-term note payable balance will be paid over the next year. 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $24,400. Prepare the adjusting journal entry for depreciation. Note: Enter debits before credits. Date General Journal Debit Credit January 31 Exercise 9-21 Part 3 3. Prepare an adjusted trial balance as of January 31, 2021. Freedom Fireworks Adjusted Trial Balance January 31, 2021 Accounts Debit Credit Totals $ 0 $ 0 Exercise 9-21 Part 4 4. Prepare a multiple-step income statement for the period ended January 31, 2021. Freedom Fireworks Multiple-Step Income Statement For the month ended January 31, 2021 Gross Profit 0 Expenses: Total Operating Expenses 0 0 0 MI Exercise 9-21 Part 5 5. Prepare a classified balance sheet as of January 31, 2021. (Hint: The carrying value of notes payable on January 31, 2021 IS $102,509; $18,479 is reported as notes payable in the current liabilities section and $84,030 is reported as notes payable in the long- term liabilities section ($18,479 + $84,030 = $102,509). (Amounts to be deducted should be indicated with a minus slgn.) Freedom Fireworks Classified Balance Sheet January 31, 2021 Assets Liabilities Total Current Liabilities 0 0 Total Liabilities Stockholder's Equity (4,308) (4,308) Total Current Assets 0 Total Stockholders' Equity Total Liabilities and Stockholders' Equity Total Assets $ (4,308) $ 0