Question

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

Accounts	Debit			Credit
Cash	$	59,700
Accounts Receivable		27,000
Inventory		37,300
Notes Receivable (5%, due in 2 years)		24,000
Land		165,000
Allowance for Uncollectible Accounts					3,200
Accounts Payable					15,800
Common Stock					230,000
Retained Earning					64,000
Totals	$	313,000		$	313,000

  
During January 2018, the following transactions occur:

January 1	Purchase equipment for $20,500. The company estimates a residual value of $2,500 and a six-year service life.
January 4	Pay cash on accounts payable, $10,500.
January 8	Purchase additional inventory on account, $92,900.
January 15	Receive cash on accounts receivable, $23,000
January 19	Pay cash for salaries, $30,800.
January 28	Pay cash for January utilities, $17,500.
January 30	Firework sales for January total $230,000. All of these sales are on account. The cost of the units sold is $120,000.

The following information is available on January 31, 2018.

Depreciation on the equipment for the month of January is calculated using the straight-line method.

The company estimates future uncollectible accounts. At the end of January, considering the total ending balance of the accounts receivable account, $4,000 is now past due (older than 90 days), while the remainder of the balance is current (less than 90 days old). The company estimates that 50% of the past due balance will be uncollectible and only 2% of the current balance will become uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)

Accrued interest revenue on notes receivable for January.

Unpaid salaries at the end of January are $33,600.

Accrued income taxes at the end of January are $10,000

I need help solving the bad expense, closing entry for expenses and closing entry for revenue

Answer 1

Journal Entry
Date	General Journal	Debit	Credit
January 31	Bad Debts Expenses	$         3,400
	Allowance for uncollectible Accounts		$         3,400
	( Recording additional allowance that needs to be made for January)
January 31	Income summary	$     215,550
	Salaries		$       64,400
	Utilities Expenses		$       17,500
	Depreciation		$           250
	Costs of Goods sold		$     120,000
	Bad debt expenses		$         3,400
	Income tax expense		$       10,000
	( Closing Entries for expenses)
January 31	Sales	$     230,000
	Interest income on notes receivable	$           100
	Income Summary		$     230,100
	( Closing Entries for revenue)
January 31	Income summary	$       14,550
	Retained Earnings		$       14,550
	( Net income for January transferred to Retained earnings)

Calculation for Closing Allowance balance
Accounts Receivable ending December 31st
Opening Accounts Receivables	$                                              27,000
Add: Sales	230,000
Less: Cash Collection	23,000
Closing Accounts Receivable	$                                            234,000
Accounts Receivable		% collectible		% uncollectible
> 90 Days	$                                                4,000	50%	$         2,000	50%	$     2,000
Current due	230,000	98%	225,400	2%	4,600
Total	$                                            234,000		$     227,400		$     6,600
Opening Allowance balance	$                                                3,200
Required Closing balance	6,600
Additional to be made	$                                                3,400