Question

a. At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $100 each. b. At the end of January, $5,300 of accounts receivable are past due, and the company estimates that 35% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 3% will not be collected. c. Accrued interest expense on notes payable for January. Interest is expected to be paid each December 31. d. Accrued income taxes at the end of January are $13,600. 3. Prepare an adjusted trial balance as of January 31, 2021.

Answer 1

Trial Balance : Debit 15558 = 15558 Credit

Step-by-step explanation:

b.) Noncollectable amount = $5300 * 35% = 1855

Entry: Dr bad debts expense 1855

Cr Allowance for bad debts 1855

(To record bad debts expense).

5300-1855= 3445 * 3% = $103 will not be collected.

Entry: Dr Bad debts expense 103

Cr Allowance for bad debts 103

( To record bad debts expense)

d.) Entry:

Dr Income tax expense 13600

Cr Income tax payable 13600

(To record accrued income tax expense).

Ledgers :

Bad debt expense = 1855+103 = 1958

Allowance for bad debts = 1855+103 = 1958

Income tax expense = 13600

income tax payable = 13600.

Trial balance:

_Dr__________________________________________________Cr____

Bad debt expense 1958 ----- 1958 Allowance for bad debts

Income tax expense 13600 ----- 13600 Allowance for bad debts

Total = 15558 ------- Total = 15558