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In: Accounting

On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances: Accounts...

On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances:

Accounts Debit Credit

Cash $ 26,700

Accounts Receivable 49,400 Allowance for Uncollectible Accounts $ 5,800

Inventory 21,600

Land 62,000

Equipment 23,000 Accumulated Depreciation 3,100

Accounts Payable 30,100

Notes Payable (6%, due April 1, 2019) 66,000

Common Stock 51,000

Retained Earnings 26,700

Totals $ 182,700 $ 182,700

During January 2018, the following transactions occur:

January 2. Sold gift cards totaling $11,200. The cards are redeemable for merchandise within one year of the purchase date.

January 6. Purchase additional inventory on account, $163,000.

January 15. Firework sales for the first half of the month total $151,000. All of these sales are on account. The cost of the units sold is $81,800.

January 23. Receive $127,000 from customers on accounts receivable.

January 25. Pay $106,000 to inventory suppliers on accounts payable.

January 28. Write off accounts receivable as uncollectible, $6,400.

January 30. Firework sales for the second half of the month total $159,000. Sales include $13,000 for cash and $146,000 on account. The cost of the units sold is $87,500.

January 31. Pay cash for monthly salaries, $53,600.

RECORD JOURNAL ENTRY

Solutions

Expert Solution

Date General Journal Debit Credit
Jan. 2 Cash 11200
Unearned revenue 11200
(To record gift cards sold)
Jan. 6 Inventory 163000
Accounts payable 163000
(To record purchase of inventory on account)
Jan. 15 Accounts receivable 151000
Sales revenue 151000
(To record sales on account)
Jan. 15 Cost of goods sold 81800
Inventory 81800
(To record cost of sales)
Jan. 23 Cash 127000
Accounts receivable 127000
(To record collections on account)
Jan. 25 Accounts payable 106000
Cash 106000
(To record payment on account)
Jan. 28 Allowance for uncollectible accounts 6400
Accounts receivable 6400
(To record uncollectible accounts)
Jan. 30 Cash 13000
Accounts receivable 146000
Sales revenue 159000
(To record sales)
Jan. 30 Cost of goods sold 87500
Inventory 87500
(To record cost of sales)
Jan. 31 Salaries expense 53600
Cash 53600
(To record payment of monthly salaries)

ekkarill92 answered 3 weeks ago
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