E3-21 PLEASE NOTE THAT THE NUMBERS IN THIS EXERCISE ARE DIFFERENT THAN IN THE TEXT!!! On January 1, 2024, the general ledger of Dynamite Fireworks includes the following account balances: Accounts Cash Debit $ Credit 28,300 Accounts Receivable. 16,550 Allowance for Uncollectible Accounts 5 1,800 Supplies 2,500 Notes Receivable (5%, due in 2 years) 30,000 Land Accounts Payable 50,000 5,200 Common stock Retained Earnings Totals 98,000 22,350 $ 127,350 $ 127,350 During January 2024, the following transactions occur Provide services to customers for cash, $53,100 Provide services to customers on account, $77,050. Write off accounts receivable as uncollectible, 51,500 (Assume the company uses the allowance method) Pay cash for salaries, $50,700 Receive cash on accounts receivable, $46,000. 2-Jan 6-Jan 15-Jan 21-lan 22-Jan 25-Jan Pay cash on accounts payable, $3,500. 30-Jan Pay cash for utilities during January, 518,500. Required) 1. Record each of the transactions listed above. Record adjusting entries on January 31. 2 a. The company estimates future uncollectible accounts. The company determines $7,000 of accounts receivable on January 31 are past due, and 35% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger to split total accounts receivable into the $5,000 past due and the remaining amount not past due) Supplies at the end of January total 51,700. All other supplies have been used Accrued interest revenue on notes receivable for January. Interest is expected to be b c received each December 31, d Unpaid salaries at the end of January are $23,500. d. received each December 31. Unpaid salaries at the end of January are $23,500. 3. 4. 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] 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. b. 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? 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? 21 3 4 3 GENERAL JOURNAL Page 19 POST DATE DESCRIPTION REF DEBIT CREDIT GENERAL LEDGER ACCOUNT Cash ACCOUNT NO 201 FOST BALANKE DATE 2004 ITEM REF DEN CREDIT DEBIT CREDIT Balance 2300 00 ACCOUNT Accounts Receivable ACCOUNT NO POS DATE 2014 ITEM REF. DENT CREDIT DENT CREDIT 16.550.00 ACCOUNT Allowance for Uncollectible accounts POST TEM REF DEBIT CREDIT DATE 2024 Delance ACCOUNT NO 115 BALANCE CREDY 20000 ACCOUNT ACCOUNT NO 125 FOST DATE 2004 BEM DENT CREDIT DONT CREDI 2,500.00 ACCOUNT Notes Receivable (5% de ACCOUNT NO FOST DATE ITEM REF DER CREDIT DENT CREDIT 00000 ACCOUNT Interest Rece DATE ACCOUNT NO POST TEM REF DENT CREDIT ACCOUNT ACCOUNT NO 140 POST BAYANCE DATE ITEM DENT CREDIT DENT CREDIT 2024 4 50.000.00 ACCOUNT Accounts Payable DATE 3034 ITEM ACCOUNT NO BALANCE DENT CREDIT DENT CREDI ACCOUNT S DATE ACCOUNT NO AITANCE TEM DENT CREDIT DENT ONIDE DATE 2024 5.200.00 ACCOUNT ACCOUNT NO 221 POST BALARGE DATE ITEM ALF DENT CREDIT DENT CREDIT ACCOUNT Common Stock ACCOUNT NO 301 POST BALANCE DATE EM RE DEBIT CREDIT DEBY CREDIT 2024 IM Balance 8.000.00 ACCOUNT Retained Earnings ACCOUNT NO 311 POST BALANCE DATE 3024 TEM DENT CREDIT DERT CREDIT 22.350.00 ACCOUNT Service Revenue DATE ACCOUNT NO 401 ITEM CREDIT DEBIT CREDIT ACCOUNT FOST ACCOUNT NO BALANCE 411 DATE DENT CREDIT DENT CREDIT ACCOUNT apples Experie ACCOUNT NO 531 DATE TIM POST REF BALANCE DENT CREDIT DENT CREDIT ACCOUNT ACCOUNT NO 523 POST DATE ITEM DEBT CREDIT DENT CREDIT ACCOUNT ACCOUNT NO 331 POST BALANCE DATE TEM DENT CREDIT DENT CRED ACCOUNT ACCOUNT NO 341 DATE POST REY BALANCE DESIT CREDIT DENT CREDIT 1 19 . Revenue Service Revenue Interest Income Total Revenue Expenses Supplies Expense Salaries Expense Utilities Expense Bad Debt Expense Total Expenses Net Income (Loss) Dynamite Fireworks Income Statement For the month ended January 31, 2024 Beginning balance January 1, 2024 Issuance of common stock Add: Net income (or Less: Net loss) Less: Dividends Ending balance January 31, 2024 Dynamite Fireworks Statement of Stockholders' Equity For the month ended January 31, 2024 Common Stock Total Retained Stockholders' Earnings Equity Assets Current Assets Cash Accounts receivable Less: Allowance for Uncollectible Accounts Interest Receivable Supplies Total current assets Long-term Assets Notes receivable Land Total Assets Dynamite Fireworks Balance Sheet January 31, 2024 Cast Accounts Receivable Allowance for Uncle Accounts Supplies Notes Revelle Land Accounts Payable Common Stock Service Revenue Sales Exper Bad Debe Expense Current liabilities Accounts Payable Salaries Payable Liabilities Total current liabilities Common Stock Retained earnings Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity Dynamite Forks Post Closing Trial Balance January 31, 2004 Deb Cred