Winter Company’s balance sheet at December 31, 2021, is presented as follows. Balance Sheet Winter Company
Balance Sheet
December 31, 2021
Cash $13,100 Accounts payable $ 8,750
Accounts receivable 19,780 Common stock 20,000
Allowance for doubtful accounts (800) Retained earnings 12,730
Inventory 9,400 $41,480
$41,480

During January 2022, the following transactions occurred. Winter uses the perpetual inventory system.
TRANSACTIONS Jan.1 Winter accepted a 4-month, 8% note from Merando Company in payment of Merando’s $1,200 account.
3 Winter wrote off as uncollectible the accounts of Inwood Corporation ($450) and Goza Company ($280).
8 Winter purchased $17,200 of inventory on account.
11 Winter sold for $28,000 on account inventory that cost $19,600.
15 Winter sold inventory that cost $700 to Mark Lauber for $1,000. Lauber charged this amount on his Visa First Bank card. The service fee charged Winter by First Bank is 3%.
17 Winter collected $22,900 from customers on account. No sales discounts were allowed.
21 Winter paid $14,300 on accounts payable. No purchase discounts were taken.
24 Winter received payment in full ($280) from Goza Company on the account written off on January 3.
27 Winter purchased supplies for $1,400 cash.
31 Winter paid other operating expenses, $3,718.

Adjustment data:

Interest is recorded for the month on the note from January 1.
Uncollectibles are expected to be 6% of the January 31, 2022, accounts receivable.
A count of supplies on January 31, 2022, reveals that $560 remains unused.

Instructions

(You may want to set up T-accounts to determine ending balances.)

Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual system.)
Prepare an adjusted trial balance at January 31, 2022.
Prepare a multiple-step income statement and a retained earnings statement for the month ended January 31, 2022, and a classified balance sheet as of January 31, 2022.