90.2K

Verified Solution

Link Copied!

On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances: The $39,000 beginning balance of inventory consists of 390 units, each costing $100. During January 2024, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,800 units for $192,600 on account ( $107 each). January 8 Purchase 1,900 units for $212,800 on account ( $112 each). January 12 Purchase 2,000 units for $234,000 on account ( $117 each). January 15 Return 145 of the units purchased on January 12 because of defects. January 19 Seli 5,800 units on account for $870, ee0 The cost of the units sold is deternined using a FIF0 perpetuat inventory systen. January 22 Receive $841,000 from customers on accounts receivable. January 24 Pay $585, ebe to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $3,400. January 31 Pay cash for salaries during January, $123,000. The following information is available on January 31,2024. a. At the end of January, the company estimates that the remaining units of inventory purchased on January 12 are expected to sell in February for only $100 each. [Hint: Determine the number of units remaining from January 12 after subtracting the units returned on January 15 and the units assumed sold (FIFO) on January 19.] b. The company records an adjusting entry for $3,055, for estimated future uncollectible accounts. c. The company accrues interest on notes payable for January. Interest is expected to be paid each December 31 . d. The company accrues income taxes at the end of January of $13,200

Answer & Explanation Solved by verified expert

See Answer