On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: …
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Question “On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: …”
On January 1, 2021, the general ledger of TNT Fireworks includes
the following account balances:
Accounts | Debit | Credit | |||||
Cash | $ | 60,100 | |||||
Accounts Receivable | 27,800 | ||||||
Allowance for Uncollectible Accounts | $ | 3,600 | |||||
Inventory | 37,700 | ||||||
Notes Receivable (5%, due in 2 years) | 28,800 | ||||||
Land | 169,000 | ||||||
Accounts Payable | 16,200 | ||||||
Common Stock | 234,000 | ||||||
Retained Earnings | 69,600 | ||||||
Totals | $ | 323,400 | $ | 323,400 | |||
During January 2021, the following transactions occur:
January | 1 | Purchase equipment for $20,900. The company estimates a residual value of $2,900 and a four-year service life. | ||
January | 4 | Pay cash on accounts payable, $10,900. | ||
January | 8 | Purchase additional inventory on account, $96,900. | ||
January | 15 | Receive cash on accounts receivable, $23,400. | ||
January | 19 | Pay cash for salaries, $31,200. | ||
January | 28 | Pay cash for January utilities, $17,900. | ||
January | 30 | Sales for January total $234,000. All of these sales are on account. The cost of the units sold is $122,000. |
Information for adjusting entries:
- Depreciation on the equipment for the month of January is
calculated using the straight-line method. - The company estimates future uncollectible accounts. The
company determines $4,400 of accounts receivable on January 31 are
past due, and 50% of these accounts are estimated to be
uncollectible. The remaining accounts receivable on January 31 are
not past due, and 3% of these accounts are estimated to be
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 $34,000.
- Accrued income taxes at the end of January are $10,400.
2.Record the adjusting entries on January 31
for the above transactions(Please write out)
3. Prepare an adjusted trial balance as of
January 31, 2021.(Please write out)
4. Prepare a multiple-step income statement for
the period ended January 31, 2021.(Please write out)
5. Prepare a classified balance sheet as of
January 31, 2021. (Deductible amounts should be indicated
with a minus sign.)(Please write out).
6. Record closing entries(Please write out)
7. Analyze how well TNT Fireworks manages its
assets:
a-1. Calculate the return on assets ratio for
the month of January.
|
Answer
Req 7 | |||||
Numerator | / | Denominator | = | Return on assets ratio | |
Net Income | / | Average Assets | = | Return on assets | |
=12,625 | / | =((462,825+(323,400-3,600))/2) | = |
0.0323 | times |
Conclusion
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