Question

Required information [The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Accounts Debit Credit Cash $ 27,100 Accounts Receivable 50,200 Allowance for Uncollectible Accounts $ 6,200 Inventory 22,000 Land 66,000 Equipment 25,000 Accumulated Depreciation 3,500 Accounts Payable 30,500 Notes Payable (6%, due April 1, 2022) 70,000 Common Stock 55,000 Retained Earnings 25,100 Totals $ 190,300 $ 190,300

During January 2021, the following transactions occur: January 2 Sold gift cards totaling $12,000. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $167,000. January 15 Firework sales for the first half of the month total $155,000. All of these sales are on account. The cost of the units sold is $83,800. January 23 Receive $127,400 from customers on accounts receivable. January 25 Pay $110,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,800. January 30 Firework sales for the second half of the month total $163,000. Sales include $17,000 for cash and $146,000 on account. The cost of the units sold is $89,500. January 31 Pay cash for monthly salaries, $54,000.

5. Prepare a classified balance sheet as of January 31, 2021. (Enter the Asset Accounts in order of liquidity. Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Balance Sheet:
Assets:			Liabilities:
Current assets:			Current liabilities:
Cash		$       19,500	Accounts Payable		$       87,500
Accounts Receivable	$   217,000		Deferred Revenue		$       12,000
Allowance for uncollectible accounts	$           600	$     217,600	Interest payable		$                -
Inventory		$       15,700	Income Tax Payable		$                -
Total Current Assets		$     252,800	Total Current Liabilities		$       99,500
Land		$       66,000	Notes Payable (6%, due April 1, 2019)		$       70,000
Equipment	$     25,000		Total Liabilities		$     169,500
Accumulated Depreciation	$      -3,500	$       21,500	Stockholder's Equity
			Common Stock		$       55,000
			Retained Earnings		$     115,800
			Total Stockholder's Equity		$     170,800
Total Assets		$     340,300	Total Liabilities and equity		$     340,300