Check my work 4 On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances: Credit 15 points Accounts Cash Accounts Receivable Inventory Land Buildings Allowance for Uncollectible Accounts Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Debit $ 12,400 36, 400 153,200 79,300 132,000 eBook $ 3,000 10,800 30,900 212,000 156,600 $413,300 Totals $413,300 References During January 2021, the following transactions occur: January 1 Borrow $112,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $2,165 are required at the end of each month for 60 months. January 4 Receive $32,200 from customers on accounts receivable. January 10 Pay cash on accounts payable, $23,000. January 15 Pay cash for salaries, $30,100. January 30 Firework sales for the month total $201,000. Sales include $66,200 for cash and $134,800 on account. The cost of the units sold is $118,500. January 31 Pay the first monthly installment of $2,165 related to the $112,000 borrowed on January 1. Round your interest calculation to the nearest dollar. The following information is available on January 31, 2021. a. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $25,200. b. The company estimates future uncollectible accounts. The company determines $4,200 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.) c. Unpaid salaries at the end of January are $27,300. d. Accrued income taxes at the end of January are $9,200. e. $19,901 of the long-term note payable balance will be paid over the next year. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis 1. Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 - 7) assuming a FIFO perpetual inventory system. The transaction on January 30 requires two entries: one to record sales revenue and one to record cost of goods sold. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances. 2. Record adjusting entries on January 31, in the 'General Journal' tab (these are shown as items 8-12). 3. Review the adjusted 'Trial Balance' as of January 31, 2021, in the 'Trial Balance' tab. 4. Prepare a multiple-step income statement for the period ended January 31, 2021, in the 'Income Statement' tab. 5. Prepare a classified balance sheet as of January 31, 2021, in the 'Balance Sheet' tab. 6. Record the closing entries in the 'General Journal' tab (these are shown as items 13 and 14). 7. Using the information from the requirements above, complete the 'Analysis' tab. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account f View transaction list Journal entry worksheet Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Choose the appropriate accounts to complete the company's balance sheet. Make sure to select 'adjus which will then populate the balances in those accounts from the adjusted trial balance. Unadjusted Freedom Fireworks Classified Balance Sheet January 31, 2021 Assets Liabilities Current Assets: Current Liabilities: Total Current Liabilities Long-term Liabilities Total Current Assets Total Liabilities Noncurrent Assets: Stockholders' Equity Total Stockholders' Equity Total Assets Total Liabilities & Stockholders' Equity Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Calculate the ratios to the nearest 1 decimal place. Analyze the following for Freedom Fireworks: (a) Calculate the debt to equity ratio. If the average debt to equity ratio for the industry is 1, is Freedom Fireworks more or less leveraged than other companies in the same industry? The debt to equity ratio is: Is the company more or less leveraged than other companies? (b) Calculate the times interest earned ratio. If the average times interest earned ratio for the industry is 20 times, is the company more or less able to meet interest payments than other companies in the same industry? The times interest earned ratio is: Is the company more or less able to meet interest payments than other companies? (c) Based on the ratios calculated in (a) and (b), would Freedom Fireworks be more likely to receive a higher or lower interest rate than the average borrowing rate in the industry?