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January 1 Purchase equipment for $20,600. The company estimates a residual value of $2,600 and a five-year service life. January 4 Pay cash on accounts payable, $10,600. January 8 Purchase additional inventory on account, $93,900. January 15 Receive cash on accounts receivable, $23,100. January 19 Pay cash for salaries, $30,900. January 28 Pay cash for January utilities, $17,600. January 30 Sales for January total $231,000. All of these sales are on account. The cost of the units sold is $120,500. The following information is available on January 31, 2021. Depreciation on the equipment for the month of January is calculated using the straight-line method. The company estimates future uncollectible accounts. The company determines $4,100 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 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) Accrued interest revenue on notes receivable for January. Unpaid salaries at the end of January are $33,700. Accrued income taxes at the end of January are $10,100.

User Ivan Zub
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Answer:

Solution Provided

Step-by-step explanation:

Equipment Purchased = $20,600

Residual Value= 2600

useful life = 5years

Dep Straight line Method = Cost- Residual Value

useful life

Dep= 20,600-2600

5

Dep=$ 3600

Cash Account

Debit Credit

Salaries 30,900

Utilities 17,600

Sales 231,000

Bal C/D 182,500

231,000 231,000

Accounts Receivable

Debit Credit

Due 4100

Uncollectable

(50%x 4100) 2050

uncollectable

(3%x 2050) 61.5

Bal C/d 1988.5

4100 4100

Accrued Income

Debit Credit

unpaid salaries 33700

Income Tax 10,100

Bal C/d 43,800

43,800 43,800

Equipment Account

Debit Credit

Purchase 20,600

Depreciation Account

Debit Credit

DEp Charge 3600

User Ayudh
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