Question

On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances:

Accounts	Debit				Credit
Cash	$	101,200
Accounts receivable		34,000
Inventory		152,000
Land		67,300
Buildings		120,000
Allowance for uncollectible accounts					$	1,800
Accumulated depreciation						9,600
Accounts payable						17,700
Bonds payable						120,000
Discount on bonds payable		30,000
Common stock						200,000
Retained earnings						155,400
Totals	$	504,500			$	504,500

During January 2021, the following transactions occurred:

January		1		Borrowed $100,000 from Captive Credit Corporation. The installment note bears interest at 7% annually and matures in 5 years. Payments of $1,980 are required at the end of each month for 60 months.
January		1		Called the bonds at the contractual call price of $100,000. The 6% bonds pay interest semiannually each June 30 and December 31.
January		4		Received $31,000 from customers on accounts receivable.
January		10		Paid cash on accounts payable, $11,000.
January		15		Paid cash for salaries, $28,900.
January		30		Firework sales for the month totalled $195,000. Sales included $65,000 for cash and $130,000 on account. The cost of the units sold was $112,500.
January		31		Paid the first monthly installment of $1,980 related to the $100,000 borrowed on January 1. (Round your interest calculation to the nearest dollar.)

The following information is available on January 31, 2021.

1. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of ten years and a residual value of $24,000.
2. At the end of January, $3,000 of accounts receivable are past due, and the company estimates that 50% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 2% will not be collected. No accounts were written off as uncollectible in January.
3. Unpaid salaries at the end of January are $26,100.
4. Accrued income taxes at the end of January are $5,000.

1. Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1-8) assuming a FIFO perpetual inventory system. The transaction on January 30 requires two entries: one to record sales revenue and one to record cost of goods sold. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances.

2. Record adjusting entries on January 31. in the 'General Journal' tab (these are shown as items 9-12).

3. Review the adjusted 'Trial Balance' as of January 31, 2021, in the 'Trial Balance' tab.

4. Prepare a multiple-step income statement for the period ended January 31, 2021, in the 'Income Statement' tab.

5. Prepare a classified balance sheet as of January 31, 2021, in the 'Balance Sheet' tab.

6. Record the closing entries in the 'General Journal' tab (these are shown as items 13-14).

7. Using the information from the requirements above, complete the 'Analysis' tab.

Please help! There are also these parts:

Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No journal entry required" in the first account field.)

Each journal entry is posted automatically to the general ledger. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection

Notice the dropdown below that gives the options to select the unadjusted, adjusted or post-closing trial balance. The option you choose will be the values used to populate the income statement and balance sheet tabs.

Prepare an income statement for the period ended January 31, 2021. Choose the appropriate accounts to complete the company's income statement. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection

UnadjustedAdjustedPost-closing

Prepare a classified balance sheet as of January 31, 2021. Choose the appropriate accounts to complete the company's balance sheet. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection.

Using the information from the requirements above, complete the 'Analysis'.

Thank you!

Answer 1