Question

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On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances:

Accounts	Debit				Credit
Cash	$	26,400
Accounts Receivable		48,800
Allowance for Uncollectible Accounts					$	5,500
Inventory		21,300
Land		59,000
Equipment		21,500
Accumulated Depreciation						2,800
Accounts Payable						29,800
Notes Payable (6%, due April 1, 2022)						63,000
Common Stock						48,000
Retained Earnings						27,900
Totals	$	177,000			$	177,000

During January 2021, the following transactions occur:

January		2		Sold gift cards totaling $10,600. The cards are redeemable for merchandise within one year of the purchase date.
January		6		Purchase additional inventory on account, $160,000.
January		15		Firework sales for the first half of the month total $148,000. All of these sales are on account. The cost of the units sold is $80,300.
January		23		Receive $126,700 from customers on accounts receivable.
January		25		Pay $103,000 to inventory suppliers on accounts payable.
January		28		Write off accounts receivable as uncollectible, $6,100.
January		30		Firework sales for the second half of the month total of $156,000. Sales include $15,000 for cash and $141,000 on account. The cost of the units sold is $86,000.
January		31		Pay cash for monthly salaries, $53,300.

5. Prepare a classified balance sheet as of January 31, 2021.

Answer 1

Prepare journal entries as follows:

Date	Account Titles	Debit	Credit
Jan. 02	Cash	$10,600
	Deferred revenue		$10,600
Jan. 06	Inventory	$160,000
	Accounts payable		$160,000
Jan. 15	Accounts Receivable	$148,000
	Sales Revenue		$148,000
Jan. 15	Cost of goods sold	$80,300
	Inventory		$80,300
Jan. 23	Cash	$126,700
	Accounts receivable		$126,700
Jan. 25	Accounts payable	$103,000
	Cash		$103,000
Jan. 28	Allowance for uncollectible Accounts	$6,100
	Accounts receivable		$6,100
Jan. 30	Cash	$15,000
	Accounts Receivable	$141,000
	Sales revenue		$156,000
Jan. 30	Cost of goods sold	$86,000
	Inventory		$86,000
Jan. 31	Salaries Expense	$53,300
	Cash		$53,300

Provide adjusting entry information for classified balance sheet, Income statement and retained earnings.