Accounts Debit Credit Cash $ 25,900 Accounts Receivable 47,800 Allowance for Uncollectible Accounts $ 5,000 Inventory 20,800 Land 54,000 Equipment 19,000 Accumulated Depreciation 2,300 Accounts Payable 29,300 Notes Payable (6%, due April 1, Year 2) 58,000 Common Stock 43,000 Retained Earnings 29,900 Totals $ 167,500 $ 167,500 During January Year 1, the following transactions occur: January 2 Sold gift cards totaling $9,600. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $155,000. January 15 The comapany sales for the first half of the month total $143,000. All of these sales are on account. The cost of the units sold is $77,800. January 23 Receive $126,200 from customers on accounts receivable. January 25 Pay $98,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $5,600. January 30 The comapany sales for the second half of the month total $151,000. Sales include $14,000 for cash and $137,000 on account. The cost of the units sold is $83,500. January 31 Pay cash for monthly salaries, $52,800.

1. Prepare a multiple step income statement for the period ended January 31, Year 1.

2.Prepare a classified balance sheet as of January 31, Year 1.

3. Record closing entries.

4. Analyzed the following for the company

Requirement 1: a. Calculate the current ratio at the end of January.

Requirement 2: a. Calculate the acid test ratio at the end of January. b. If the average acid test ratio for the industry is 1.50, is the company more or less likely to have difficulty paying its currently maturing debts (compare to the industry average)?