[The following information applies to the questions displayed below) On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Credit Debit $ 26, 100 48,200 $ 5,200 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (64, due April 1, 2022) Common Stock Retained Earnings Totals 21,000 56,000 20,000 2,500 29,500 60,000 45,000 29, 100 $171,300 $171.300 During January 2021, the following transactions occur. January 2 Sold gift cards totaling $10,000. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $157,000. January 15 Firework sales for the first half of the month total $145,000. All of these sales are on account. The cost of the units sold is $78,800. January 23 Receive $126,400 from customers on accounts receivable. January 25 Pay $100,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $5,800. January 30 Firework sales for the second half of the month total $153,000. Sales include $16,000 for cash and $137,000 on account. The cost of the units sold is $84,500. January 31 Pay cash for monthly salaries, $53,800. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a residual value of $4,400 and a two-year service life. • The company estimates future uncollectible accounts. The company determines $21,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) • Accrued interest expense on notes payable for January • Accrued income taxes at the end of January are $14,000. • Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a residual value of $4,400 and a two-year service life. • The company estimates future uncollectible accounts. The company determines $21,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) • Accrued interest expense on notes payable for January. • Accrued income taxes at the end of January are $14,000. . By the end of January, $4,000 of the gift cards sold on January 2 have been redeemed. 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a particular transaction/event. select "No Journal Entry Required in the first account field.) View transaction list View journal entry worksheet No General Journal Debit Credit 2 1 Date January January 31 650 Depreciation Expense Sales Revenue 2 January 31 5.200 Allowance for Uncollectible Accounts Bad Debt Expense Accounts Receivable 3 January 31 Bad Debt Expense Allowance for Uncollectible Accounts January 31 Interest Expense Notes Payable 14.000 ACME Fireworks Adjusted Trial Balance January 31, 2021 Accounts Debit Credit Cash $ 26,100 X 48,200 X 5,200 X Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable 21,000 56,000 20,000 2,500 X 29,500 60,000 Common Stock Retained Earnings 45,000 29,100 4. Prepare a multiple-step income statement for the period ended January 31, 2021. ACME FIREWORKS Income Statement For the year ended January 31, 2021 Sales Revenue | $ 298,000 Cost of Goods Sold 163,300 Gross Loss $ 134,700 Salaries Expense Depreciation Expense Bad Debt Expense Interest Expense Total operating expenses Operating Income 53,000 650 19,412 300 73,362 61,338 61,338 $ 61,338