In: Accounting
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
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) |