Reference no: EM132315591
Question :
The general ledger of Pop's Fireworks includes the following account balances in 2021:
|
Accounts
|
Debit
|
Credit
|
|
|
Cash
Accounts Receivable
|
|
|
$ 21,200
41,500
|
|
|
|
Allowance for Uncollectible Accounts
|
|
$ 2,200
|
|
|
Supplies
|
6,700
|
|
|
|
Notes Receivable (8%, due in 2 years)
|
10,000
|
|
|
|
Land
|
85,000
|
|
|
|
Accounts Payable
|
|
12,300
|
|
|
Common Stock
|
|
106,000
|
|
|
Retained Earnings
|
|
29,900
|
|
|
Service Revenue
|
|
124,800
|
|
|
Salaries Expense
|
70,900
|
|
|
|
Utilities Expense
|
24,200
|
|
|
|
Supplies Expense
|
15,700
|
|
|
|
Totals
|
$275,200
|
$275,200
|
|
In addition, the following transactions occurred during 2021 and are not yet reflected in the account balances above:
1. Provide additional services on account for $7,000. All services on account include terms 2/10, n/30.
2. Receive cash from customers within 10 days of the services being provided on account. The customers were originally charged $5,000.
3. Write off customer accounts of $1,500 as uncollectible.
Required:
1. Record each of the transactions listed above.
2. Record the following adjusting entries on December 31.
a. Estimate that 10% of the balance of accounts receivable (after transactions in requirement 1) will not be collected.
b. Accrue interest on the note receivable of $10,000, which was accepted on October 1, 2021. Interest is due each September 30.
3. Prepare an adjusted trial balance as of December 31, 2021, after updating account balances for transactions during the year (requirement 1) and adjusting entries at the end of the year (requirement 2).