Exercise 3-21 On January 1, 2018, the general ledger of Dynamite Fireworks includes the following account balances: Accounts Debit Credit Cash $ 25,800 Accounts Receivable 7,200 Supplies 5,100 Land 70,000 Accounts Payable 5,200 Common...

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Accounting

Exercise 3-21
On January 1, 2018, the general ledger of Dynamite Fireworksincludes the following account balances:
  Accounts Debit Credit
  Cash $ 25,800
  AccountsReceivable 7,200
  Supplies 5,100
  Land 70,000
  AccountsPayable 5,200
  Common Stock 85,000
  RetainedEarnings 17,900
       Totals $ 108,100 $ 108,100

During January 2018, the following transactions occur:

January 2 Purchase rental space for one year in advance, $12,000($1,000/month).
January 9 Purchaseadditional supplies on account, $5,500.
January 13 Provide servicesto customers on account, $27,500.
January 17 Receive cash inadvance from customers for services to be provided in the future,$5,700.
January 20 Pay cash forsalaries, $13,500.
January 22 Receive cash onaccounts receivable, $26,100.
January 29 Pay cash onaccounts payable, $6,000.

The following information is available on January 31, 2018.
Rent for the month of January has expired.
Supplies remaining at the end of January total $4,800.
By the end of January, $4,700 of services has been provided tocustomers who paid in advance on January 17.
Unpaid salaries at the end of January are $4,400.
Record each of the transactions listed above in the 'GeneralJournal' tab (these are shown as items 1 - 7). Review the 'GeneralLedger' and the 'Trial Balance' tabs to see the effect of thetransactions on the account balances.
2. Record the adjusting entries in the 'General Journal' tab(these are shown as items 8-11).
3. Review the adjusted 'Trial Balance' as of January 31,2018.
4. Prepare an income statement for the period ended January 31,2018, in the 'Income Statement' tab.
5. Prepare a classified balance sheet as of January 31, 2018 inthe 'Balance Sheet' tab.
6. Record the closing entries in the 'General Journal' tab (theseare shown as items 12 and 13).
7.
Using the information from the requirements above, complete the'Analysis' tab.

Answer & Explanation Solved by verified expert

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Since the question has multiple subparts I have answered the first four parts Part a The journal entries are prepared as below Date General Journal Debit Credit Jan02 Prepaid Rent 12000 Cash 12000 Jan09 Supplies 5500 Accounts Payable 5500 Jan13 Accounts Receivable 27500 Service Revenue 27500 Jan17 Cash See Answer

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Accounts	Debit		Credit
Cash	$	25,800
AccountsReceivable		7,200
Supplies		5,100
Land		70,000
AccountsPayable				5,200
Common Stock				85,000
RetainedEarnings				17,900

Totals	$	108,100	$	108,100

January	2	Purchase rental space for one year in advance, $12,000($1,000/month).
January	9	Purchaseadditional supplies on account, $5,500.
January	13	Provide servicesto customers on account, $27,500.
January	17	Receive cash inadvance from customers for services to be provided in the future,$5,700.
January	20	Pay cash forsalaries, $13,500.
January	22	Receive cash onaccounts receivable, $26,100.
January	29	Pay cash onaccounts payable, $6,000.