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On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Debit $ 59,000 Accounts Credit Cash Accounts Receivable 25,600 Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable $ 2,500 36,600 15,600 158,000 15,100 Common Stock 223,000 54,200 Retained Earnings Totals $294,800 $294,800 During January 2021, the following transactions occur: January 1 Purchase equipment for $19,800. The company estimates a residual value of $1,800 and a six-year service life. January 4 Pay cash on accounts payable, $9,800. January 8 Purchase additional inventory on account, $85,900. January 15 Receive cash on accounts receivable, $22,300. January 19 Pay cash for salaries, $30,100. January 28 Pay cash for January utilities, $16,800. January 30 Sales for January total $223,000. All of these sales are on account. The cost of the units sold is $116,500. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company estimates future uncollectible accounts. The company determines $3,300 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remainin accounts receivable on January 31 are not past due, and 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest revenue on notes receivable for January. d. Unpaid salaries at the end of January are $32,900. e. Accrued income taxes at the end of January are $9,300.

On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Debit $ 59,000 Accounts Credit Cash Accounts Receivable 25,600 Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable $ 2,500 36,600 15,600 158,000 15,100 Common Stock 223,000 54,200 Retained Earnings Totals $294,800 $294,800 During January 2021, the following transactions occur: January 1 Purchase equipment for $19,800. The company estimates a residual value of $1,800 and a six-year service life. January 4 Pay cash on accounts payable, $9,800. January 8 Purchase additional inventory on account, $85,900. January 15 Receive cash on accounts receivable, $22,300. January 19 Pay cash for salaries, $30,100. January 28 Pay cash for January utilities, $16,800. January 30 Sales for January total $223,000. All of these sales are on account. The cost of the units sold is $116,500. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company estimates future uncollectible accounts. The company determines $3,300 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remainin accounts receivable on January 31 are not past due, and 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest revenue on notes receivable for January. d. Unpaid salaries at the end of January are $32,900. e. Accrued income taxes at the end of January are $9,300.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 12E: Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120...
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On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Accounts Debit Credit $ 59,000 25,600 Cash Accounts Receivable Allowance for Uncollectible Accounts $ 2,500 Inventory Notes Receivable (5%, due in 2 years) 36,600 15,600 Land 158,000 Accounts Payable 15,100 Common Stock 223,000 Retained Earnings 54,200 Totals $294,800 $294,800 During January 2021, the following transactions occur: January 1 Purchase equipment for $19,80O. The company estimates a residual value of $1,800 and a six-year service life. January 4 Pay cash on accounts payable, $9,800. January 8 Purchase additional inventory on account, $85,900. January 15 Receive cash on accounts receivable, $22,300. January 19 Pay cash for salaries, $30,100. January 28 Pay cash for January utilities, $16,800. January 30 Sales for January total $223,000. All of these sales are on account. The cost of the units sold is $116,500. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company estimates future uncollectible accounts. The company determines $3,300 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 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest revenue on notes receivable for January. d. Unpaid salaries at the end of January are $32,900. e. Accrued income taxes at the end of January are $9,300.
Transcribed Image Text:On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Accounts Debit Credit $ 59,000 25,600 Cash Accounts Receivable Allowance for Uncollectible Accounts $ 2,500 Inventory Notes Receivable (5%, due in 2 years) 36,600 15,600 Land 158,000 Accounts Payable 15,100 Common Stock 223,000 Retained Earnings 54,200 Totals $294,800 $294,800 During January 2021, the following transactions occur: January 1 Purchase equipment for $19,80O. The company estimates a residual value of $1,800 and a six-year service life. January 4 Pay cash on accounts payable, $9,800. January 8 Purchase additional inventory on account, $85,900. January 15 Receive cash on accounts receivable, $22,300. January 19 Pay cash for salaries, $30,100. January 28 Pay cash for January utilities, $16,800. January 30 Sales for January total $223,000. All of these sales are on account. The cost of the units sold is $116,500. Information for adjusting entries: a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company estimates future uncollectible accounts. The company determines $3,300 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 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest revenue on notes receivable for January. d. Unpaid salaries at the end of January are $32,900. e. Accrued income taxes at the end of January are $9,300.
7. Analyze how well TNT Fireworks manages its assets: Requirement 1: a-1. Calculate the return on assets ratio for the month of January. Return on Assets Ratio Choose Numerator Choose Denominator Return on Assets Ratio %3D Net Income + Total Assets Return on assets $ 13,605 + $ 424,205 = 3.2%
Transcribed Image Text:7. Analyze how well TNT Fireworks manages its assets: Requirement 1: a-1. Calculate the return on assets ratio for the month of January. Return on Assets Ratio Choose Numerator Choose Denominator Return on Assets Ratio %3D Net Income + Total Assets Return on assets $ 13,605 + $ 424,205 = 3.2%
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