Question

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

Accounts	Debit			Credit
Cash	$	25,100
Accounts Receivable		46,200
Allowance for Uncollectible Accounts				$	4,200
Inventory		20,000
Land		46,000
Equipment		15,000
Accumulated Depreciation					1,500
Accounts Payable					28,500
Notes Payable (6%, due April 1, 2019)					50,000
Common Stock					35,000
Retained Earnings					33,100
Totals	$	152,300		$	152,300

  
During January 2018, the following transactions occur:

January 2. Sold gift cards totaling $8,000. The cards are redeemable for merchandise within one year of the purchase date.
January 6. Purchase additional inventory on account, $147,000.
January 15. Firework sales for the first half of the month total $135,000. All of these sales are on account. The cost of the units sold is $73,800.
January 23. Receive $125,400 from customers on accounts receivable.
January 25. Pay $90,000 to inventory suppliers on accounts payable.
January 28. Write off accounts receivable as uncollectible, $4,800.
January 30. Firework sales for the second half of the month total $143,000. Sales include $11,000 for cash and $132,000 on account. The cost of the units sold is $79,500.

5. Prepare a classified balance sheet as of January 31, 2018.

6. Record closing entries.

Answer 1

Date	General Journal	Debit	Credit
January 02	Cash	8000
	Deferred revenue		8000
January 06	Inventory	147000
	Accounts payable		147000
January 15	Accounts Receivable	135000
	Sales revenue		135000
January 15	Cost of goods sold	73800
	Inventory		73800
January 23	Cash	125400
	Accounts Receivable		125400
January 25	Accounts payable	90000
	Cash		90000
January 28	Allowances for uncollectible accounts	4800
	Accounts receivable		4800
January 15	Cash	11000
	Accounts Receivable	132000
	Sales revenue		143000
January 15	Cost of goods sold	79500
	Inventory		79500

Assets	Amount	Liability and equity shareholders fund	Amount
Cash	79500	Accumulated Depreciation	1500
Accounts Receivable	183000	Accounts Payable	85500
Allowance for Uncollectible Accounts	600	Deferrec revenue	8000
Inventory	13700	Notes Payable (6%, due April 1, 2019)	50000
Land	46000	Common Stock	35000
Equipment	15000	Retained Earnings	157800
	337800		337800