E3-21 On January 1, 2024, the general ledger of Dynamite Fireworks includes the following account balances: Accounts Debit Credit Cash $23,900 Accounts Receivable 13,600 Allowance for Uncollectible $1,400 Accounts Supplies 2,500 Notes Receivable (6%, due in 2 20,000 years) Land 77,000 Accounts Payable 7,200 Common stock 96,000 Retained Earnings Totals 32,400 $137.000 $137.000 1. During January 2024, the following transactions occur: 2-Jan Provide services to customers for cash, $35,100. 6-Jan Provide services to customers on account, $72,400. 15-Jan Write off accounts receivable as uncollectible, $1,000. (Assume the company uses the allowance method) 20-Jan Pay cash for salaries, $31,400 22-Jan Receive cash on accounts receivable, $70,000. 25-Jan Pay cash on accounts payable, $5,500. 30-Jan Pay cash for utilities during January, $13,700. Required: Record each of the transactions listed above. 2. Record adjusting entries on January 31. The company estimates future uncollectible accounts. The company determines $5,000 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on lanuary 31 are b. Supplies at the end of January total $700. All other supplies have been used. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31. d. Unpaid salaries at the end of January are $33,500. a. C. 3. Prepare an adjusted trial balance as of January 31, 2024, after updating beginning balances (above) for transactions during January (Requirement 1) and adjusting entries at the end of January (Requirement 2) [Note: a worksheet is provided and the trial balance there counts for this] 4. Prepare an income statement for the period ended January 31, 2024. 5. Prepare a classified balance sheet as of January 31, 2024. 6. Record the closing entries. 7. Prepare a post-closing trial balance (Cathy added) 8. Analyze how well 3D Family Fireworks manages its receivables: a. Calculate the receivables turnover ratio for the month of January. (Hint: For the numerator, use total services provided to customers on account.) If the industry average of the receivables turnover ratios for the month of January is 4.2 times, is the company collecting cash from customers more or less efficiently than other companies in the same industry? b. Calculate the ratio of Allowance for Uncollectible Accounts to Accounts Receivable at the end of January. Based on a comparison of this ratio to the same ratio at the beginning of January, does the company expect an improvement or worsening in cash collections from customers on credit sales? GENERAL JOURNAL Page: 19 POST. DATE DESCRIPTION REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9 GENERAL LEDGER ACCOUNT: Cash ACCOUNT NO: 101 POST BALANCE DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT 2024 Jan 1 Balance 23,900.00 ACCOUNT: Accounts Receivable ACCOUNT NO: 111 POST BALANCE DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT 2024 Jan 1 Balance 13,600.00 ACCOUNT: Allowance for Uncollectible accounts ACCOUNT NO: 115 POST BALANCE DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT 2024 Jan 1 Balance 1,400.00 1,400.00 1,400.00 TRIAL BALANCE DEBIT CREDIT ADJUSTMENTS DEBIT CREDIT ADJUSTED TRIAL BALANCE DEBIT CREDIT INCOME STATEMENT DEBIT CREDIT BALANCE SHEET DEBIT CREDIT ACCOUNT NAME 1 Cash 2 Accounts Receivable 3 Allowance for Uncollectible Accounts 4 Supplies S Notes Receivable 6 Interest Receivable 7 Land 8 Accounts Payable Salaries Payable o Common Stock 1 Retained Earnings 2 Service Revenue 3 Interest Income Supplies Expense 5|Salaries Expense 6 Utilities Expense Bad Debt Expense Dynamite Fireworks Income Statement For the month ended January 31, 2024 - Revenue - Service Revenue Interest Income Total Revenue . Expenses 1 Supplies Expense 2 Salaries Expense 3 Utilities Expense 2 Bad Debt Expense 5 Total Expenses 5 Net Income (Loss) 7 $ 3 Dynamite Fireworks Statement of Stockholders' Equity For the month ended January 31, 2024 Common Stock Retained Earnings Total Stockholders' Equity Beginning balance January 1, 2024 Issuance of common stock Add: Net income (or Less: Net loss) Less: Dividends Ending balance January 31, 2024 $ $ $ Post closing trail balance 31, 2024 Account Debit Credit Cash Accounts Receivable Allowance for Uncollectible Accounts Supplies Notes Receivable Interest Receivable Land Accounts Payable Salaries Payable Common Stock Retained Earnings Service Revenue Interest Income Supplies Expense Salaries Expense Utilities Expense Bad Debt Expense