Wildhorse Co.'s balance sheet at December 31, 2021, is presented below. Wildhorse Co. Balance Sheet December 31, 2021 Cash $13,240 Accounts payable Accounts receivable 20,600 Common stock Allowance for doubtful accounts (770) Retained earnings Inventory 9,680 $42,750 $8,520 19,100 15,130 $42,750 During January 2022, the following transactions occurred. Wildhorse uses the perpetual inventory method. Jan. 1 Wildhorse accepted a 4-month, 8% note from Betheny Company in payment of Betheny's $1,200 account. 3 8 11 15 Wildhorse wrote off as uncollectible the accounts of Walter Corporation ($500) and Drake Company ($200). Wildhorse purchased $15,940 of inventory on account. Wildhorse sold for $23,900 on account inventory that cost $16,060. Wildhorse sold inventory that cost $720 to Jack Rice for $1,000. Rice charged this amount on his Visa First Bank card. The service fee charged Wildhorse by First Bank is 3%. Wildhorse collected $22,200 from customers on account. Wildhorse paid $15,710 on accounts payable. Wildhorse received payment in full ($200) from Drake Company on the account written off on January 3. Wildhorse purchased advertising supplies for $1,380 cash. Wildhorse paid other operating expenses, $3,450. 17 21 24 27 31 Adjustment data: 1. 2. 3. Interest is recorded for the month on the note from January 1. Bad debts are expected to be 6% of the January 31, 2022, accounts receivable. A count of advertising supplies on January 31, 2022, reveals that $560 remains unused. The income tax rate is 30%. (Hint: Prepare the income statement up to Income before taxes and multiply by 30% to compute the amount; round to whole dollars.) 4. (You may want to set up T-accounts to determine ending balances.) Date Account Titles and Explanation Debit Credit in. 1 Notes Receivable 1200 Accounts Receivable 1200 in. 3 Bad Debts Expense 700 Accounts Receivable 700 in. 8 Inventory 15940 Accounts Payable 15941 in. 11 Accounts Receivable 23900 Sales Revenue 23900 (To record sales revenues.) in. 11 - Cost of Goods Sold 16060 Inventory 16061 (To record cost of goods sold.) in. 15 A Accounts Receivable 970 Service Charge Expense 30 Sales Revenue 1000 (To record sales revenues and service charges.) in. 15 A Cost of Goods Sold 720 Inventory 72 (To record cost of goods sold.) in. 17 A Cash 22200 Accounts Receivable 2220 in. 21 Accounts Payable 15710 Cash 1571 in. 24 4 Cash 200 Other Receivables 200 (To reverse allowance for doubtful debts.) in. 24 Accounts Receivable 1380 Allowance for Doubtful Accounts 1381 (To record cash received from Drake Company.) in. 27 Supplies 3450 Cash 3451 in. 31 4 Other Operating Expenses 8 Cash in. 31 (1) Interest Receivable 512 Interest Revenue 51: (2) Bad Debts Expense 820 Allowance for Doubtful Accounts 821 (3) Supplies Expense 845 Supplies 84 (4) Income Tax Expense 845 Income Taxes Payable 84 Prepare an adjusted trial balance at January 31, 2022. (Round answers to 0 decimal places, e.g. 1,250.) WILDHORSE CO. Adjusted Trial Balance January 31, 2022 Debit Credit Cash $ 15100 $ Accounts Receivable 21370 Allowance for Doubtful Accounts 1282 Inventory 8840 Notes Receivable 1200 Supplies 560 Interest Revenue 8 Accounts Payable 8750 Income Taxes Payable 845 Common Stock 19100 Retained Earnings 15130 Sales Revenue 24900 Cost of Goods Sold 16780 Bad Debts Expense 1212 Service Charge Expense 30 Other Receivables 200 Other Operating Expenses 3450 Supplies Expense 820 Income Tax Expense 845 Totals $ 70215 $ 70215 Prepare an income statement for the month ending January 31, 2022. (Round answers to 0 decimal places, e.g. 1,250.) WILDHORSE CO. Income Statement For the Month Ending January 31, 2022 Sales Revenues $ 24900 Other Receivables 20 Net Sales 25100 Operating Expenses A Service Charge Expense $ 16780 Other Operating Expenses 1212 Bad Debts Expense 3450 Supplies Expense 820 i Total Operating Expenses 22292 Income From Operations 2808 Other Revenues and Gains Interest Revenue 8 Income Before Income Taxes 2816 Income Tax Expense 845 Net Income /(Loss) $ 1971 Prepare a retained earnings statement for the month ending January 31, 2022. (Round answers to 0 decimal places, e.g. 1,250.) WILDHORSE CO. Retained Earnings Statement For the Month Ending January 31, 2022 Retained Earnings, January 1 $ 15130 Add A : Net Income / (Loss) 1971 Retained Earnings, January 31 $ 17101 Prepare a classified balance sheet as of January 31, 2022. (List Current Assets in order of liquidity. Round answers to 0 decimal places, e.g. 1,250.) WILDHORSE CO. Balance Sheet January 31, 2022 Assets Current Assets Cash $ Accounts Receivable Allowance for Doubtful Accounts $ (1282) Less : Inventory 8840 Notes Receivable sup Interest Revenue Total Assets $ Liabilities and Stockholders' Equity Current Liabilities Accounts Payable $ 8750 Income Taxes Payable 845 Total Liabilities $ Stockholders' Equity Common Stock 19100 Retained Earnings 17101 Total Stockholders' Equity Total Liabilities and Stockholders' Equity A $