How do you prepare the classified balance sheet, record closing entries, and find the turnover ratio and gross profit ratio?
Required information (The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Accounts Payable Notes Payable (8%, due in 3 years) Common Stock Retained Earnings Totals Debit Credit $ 21,900 36,500 $ 3,100 30,000 61,600 32,400 30,000 56,000 28,500 $ 150,000 $150,000 The $30,000 beginning balance of inventory consists of 300 units, each costing $100. During January 2021, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,200 units for $126,000 on account ($105 each). January 8 Purchase 1,300 units for $143,000 on account ($110 each). January 12 Purchase 1,400 units for $161,000 on account ($115 each). January 15 Return 100 of the units purchased on January 12 because of defects. January 19 Sell 4,000 units on account for $600,000. The cost of the units sold is determined using a FIFO perpetual inventory system. January 22 Receive $580,000 from customers on accounts receivable. January 24 Pay $410,000 to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $2,500. January 31 Pay cash for salaries during January, $128,000. The following information is available on January 31, 2021. a. At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $100 each. b. The company estimates future uncollectible accounts. The company determines $4,000 of accounts receivable on January 31 are past due, and 40% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) C. Accrued interest expense on notes payable for January. Interest is expected to be paid each December 31. d. Accrued income taxes at the end of January are $12,300. 5. Prepare a classified balance sheet as of January 31, 2021. (Amounts to be deducted should be indicated with a minus sign.) BIG BLAST FIREWORKS Classified Balance Sheet January 31, 2021 Assets Liabilities $ 63,900 Cash Inventory Accounts receivable Total current assets 63,900 Total current liabilities Total liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity Total assets $ 63,900 6. Record closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is not complete. No Date General Journal Debit Credit January 31, 2021 Sales revenue 600,000 Retained earnings 600,000 2 January 31, 2021 Retained earnings Cost of goods sold 7. Analyze how well Big Blast Fireworks' manages its inventory: a-1. Calculate the inventory turnover ratio for the month of January. (Round your final answer to 1 decimal) The Inventory turnover ratio is a-2. If the industry average of the inventory turnover ratio for the month of January is 18.5 times, is the company managing its inventory more or less efficiently than other companies in the same industry? O More Less b-1. Calculate the gross profit ratio for the month of January. (Round your final answer to 1 decimal) The Gross Profit Ratio is
