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.

Solution Provided

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