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On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances:
Accounts Debit Credi
Cash $25,800
Accounts Receivable 47.600
Allowance for Uncollectible Accounts $4,900
Inventory 20,700
Land 53,000
Equipment 18.500
Accumulated Depreciation 2,200
Accounts Payable 29,200
Notes Payable (68, due April 1, 2022) 57.000
Common Stock 42.000
Retained Earnings 30,300
Totals $165,600 $165,600
During January 2021, the following transactions occur:
January 2 Sold gift cards totaling $9,400. The cards are redeemable for merchandise within one year of the purchase date.
January 6 Purchase additional inventory on account, $154,000.
January 15 Firework sales for the first half of the month total $142,000. All of these sales are on account. The cost of the units sold is $77,300.
January 23 Receive $126,100 from customers on accounts receivable.
January 25 Pay $97,000 to inventory suppliers on accounts payable.
January 28 Write off accounts receivable as uncollectible, $5,500.
January 30 Firework sales for the second half of the month total $150,000. Sales include $15,000 for cash and $135,000 on account. The cost of the units sold is $83,000.
January 31 Pay cash for monthly salaries, $52,700.
Prepare a multiple-step income statement for the period ended January 31, 2021.

Sagot :

anthougo

Answer:

ACME Fireworks

Income Statement for the period ended January 31, 2021

Sales revenue                        $292,000

Cost of goods sold                   160,360

Gross profit                             $131,640

Operating expenses:

Salaries                      52,700

Bad debts expense        600   53,300

Net income                             $78,340

Explanation:

a) Data and Calculations:

ACME Fireworks

Accounts                               Debit        Credit

Cash                                     $25,800

Accounts Receivable             47,600

Allowance for Uncollectible Accounts  $4,900

Inventory                                20,700

Land                                       53,000

Equipment                              18,500

Accumulated Depreciation                     2,200

Accounts Payable                                 29,200

Notes Payable (68, due April 1, 2022) 57,000

Common Stock                                     42,000

Retained Earnings                                30,300

Totals                               $165,600 $165,600

Inventory

Account Titles               Debit        Credit

Beginning balance     20,700

Accounts payable    154,000

Cost of goods sold                      $77,300

Cost of goods sold                        83,000

Sales

Account Titles               Debit        Credit

Accounts receivable                 $142,000

Cash                                              15,000

Accounts receivable                   135,000

Income summary    $292,000

Cost of goods sold

Account Titles               Debit        Credit

Inventory                   $77,360

Inventory                     83,000

Income summary                       $160,360

Salaries $52,700

Allowance for Uncollectible Accounts

Account Titles               Debit        Credit

Beginning balance                       $4,900

Bad Debts expense                          600

Ending balance         $5,500

Transaction Analysis:

January 2 Cash $9,400 Gift Cards Liability $9,400

January 6 Inventory $154,000 Account payable $154,000

January 15 Accounts receivable $142,000. Sales revenue $142,000

Cost of the units sold $77,300 Inventory $77,300

January 23 Cash $126,100 Accounts receivable $126,100

January 25 Accounts payable $97,000 Cash $97,000

January 28 Uncollectible Allowance $5,500 Accounts receivable $5,500

January 30 Cash $15,000 Accounts receivable $135,000 Sales revenue $150,000

Cost of the units sold $83,000 Inventory $83,000

January 31 Salaries expense $52,700 Cash $52,700

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