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The general ledger of Pop's Fireworks includes the following account balances in 2021: Accounts Debit Credit...

The general ledger of Pop's Fireworks includes the following account balances in 2021:

Accounts Debit Credit
Cash $ 24,600
Accounts Receivable 50,000
Allowance for Uncollectible Accounts $ 5,600
Supplies 11,800
Notes Receivable (8%, due in 2 years) 44,000
Land 102,000
Accounts Payable 15,700
Common Stock 174,000
Retained Earnings 31,600
Service Revenue 128,200
Salaries Expense 72,600
Utilities Expense 29,300
Supplies Expense 20,800
Totals $ 355,100 $ 355,100

In addition, the following transactions occurred during 2021 and are not yet reflected in the account balances above:

June 3 Provide additional services on account for $24,000. All services on account include terms 2/10, n/30.
June 8 Receive cash from customers within 10 days of the services being provided on account. The customers were originally charged $13,500.
November 15 Write off customer accounts of $3,200 as uncollectible.

1. Record each of the transactions listed above.

2. Record the following adjusting entries on December 31. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

  1. Estimate that 10% of the balance of accounts receivable (after transactions in requirement 1) will not be collected.
  2. Accrue interest on the note receivable of $44,000, which was accepted on October 1, 2021. Interest is due each September 30.

3. Prepare an adjusted trial balance as of December 31, 2021.

4. Prepare an income statement for the period ended December 31, 2021. (Amounts to be deducted should be indicated with a minus sign.)

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

6. Record closing entries. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

-Record the closure of revenue accounts.

-Record the closure of expense accounts.

7. Analyze the following information:

  1. By how much does the year-end estimate of future uncollectible accounts reduce net income in 2021?

  2. What is the ending balance of Allowance for Uncollectible Accounts?

  3. What amount of cash is expected to be collected from accounts receivable?

a. Bad Debt Expense   
b. Ending Balance of Allowance for Uncollectible Accounts
c. Amount Expected to be collected

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Expert Solution

ekkarill92 answered 2 years ago
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