On January 1, 2018, the general ledger of Big Blast
Fireworks includes the following account balances:
Accounts Debit
Credit
Cash $ 21,900
Accounts Receivable 36,500
Inventory 30,000
Land 61,600
Allowance for
Uncollectible Accounts 3,100
Accounts Payable 32,400
Notes Payable (8%,
due in 3 years) 30,000
Common Stock 56,000
Retained Earnings 28,500
Totals $ 150,000
$
150,000
The $30,000 beginning balance of inventory consists of 300 units, each costing $100. During January 2018, Big Blast Fireworks had the following inventory transactions:
January 3 Purchase 1,200 units for $126,000 on account ($105
each).
January 8 Purchase 1,300 units for $143,000 on account ($110
each).
January 12 Purchase 1,400 units for $161,000 on account
($115 each).
January 15 Return 100 of the units purchased on January 12
because of defects.
January 19 Sell 4,000 units on account for $600,000. The
cost of the units sold is determined using a FIFO perpetual inventory system.
January 22 Receive $580,000 from customers on accounts
receivable.
January 24 Pay $410,000 to inventory suppliers on accounts
payable.
January 27 Write off accounts receivable as uncollectible,
$2,500.
January 31 Pay cash for salaries during January, $128,000.
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