Exercise 7-37 (Algo) General Ledger Exercise [LO7-5, 7-6, 7-7, 7-9]

On January 1, 2024, the general ledger of 3D Family Fireworks includes the following account balances:

Accounts	Debit	Credit
Cash	$ 25,300
Accounts Receivable	14,400
Allowance for Uncollectible Accounts		$ 1,700
Supplies	3,000
Notes Receivable (6%, due in 2 years)	24,000
Land	52,100
Accounts Payable		4,900
Common Stock		65,300
Retained Earnings		46,900
Totals	$ 118,800	$ 118,800

During January 2024, the following transactions occur:

1. January 2	Provide services to customers for cash, $26,600.
2. January 6	Provide services to customers on account, $82,000.
3. January 15	Write off accounts receivable as uncollectible, $1,100.
4. January 20	Pay cash for salaries, $34,500.
5. January 22	Receive cash on accounts receivable, $76,900.
6. January 25	Pay cash on accounts payable, $3,670.
7. January 30	Pay cash for utilities during January, $9,100.

The following information is available on January 31, 2024.

At the end of January, $3,300 of accounts receivable are past due, and the company estimates that 25% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 5% will not be collected. The note receivable of $24,000 is considered fully collectible and therefore is not included in the estimate of uncollectible accounts.

Supplies at the end of January total $510.

Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31.

Unpaid salaries at the end of January are $26,600.

Complete this question by entering your answers in the tabs below.

Requirement

General Journal

General Ledger

Trial Balance

Income Statement

Balance Sheet

Analysis

Using the information from the requirements above, complete the 'Analysis' tab. Note: Enter your Accounts receivable turnover ratio in 1 decimal place and Ratio of allowance for uncollectible accounts in whole percentage.

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?
Accounts Receivable turnover:		times
The company is collecting more efficiently. (true or false)	True
(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?
Ratio of Allowance for Uncollectible Accounts to Accounts Receivable		%
Should the company expect improving or worsening conditions?	Improving