On January 1, 2018, the general ledger of ACME Fireworks includes the following
ID: 2437356 • Letter: O
Question
On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances:
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.
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 $ 152,300Explanation / Answer
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