Information:

1)

2)

a. Record the closing entry for revenue accounts.

b. Record the closing entry for expense accounts.

3)

a. Calculate the current ratio at the end of January.

b. Calculate the acid-test ratio at the end of January.

c. Assume the notes payable were due on April 1, 2021, rather than April 1, 2022. Calculate the revised current ratio at the end of January.

No Date Debit Credit 1 January 31 General Journal Depreciation Expense Accumulated Depreciation 700 700 2 January 31 13,020 Bad Debt Expense Allowance for Uncollectible Accounts 13,020 3 January 31 310 Interest Expense Interest Payable 310 4 January 31 14,200 Income Tax Expense Income Tax Payable 14,200 January 31 4,200 Deferred Revenue Sales Revenue 4,200 Required information [The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2022) Common Stock Retained Earnings Totals Debit Credit $ 26,300 48,600 $ 5,400 21,200 58,000 21,000 2,700 29,700 62,000 47,000 28,300 $175, 100 $175, 100 During January 2021, the following transactions occur: January 2 Sold gift cards totaling $10,400. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $159,000. January 15 Firework sales for the first half of the month total $147,000. All of these sales are on account. The cost of the units sold is $79,800. January 23 Receive $126,600 from customers on accounts receivable. January 25 Pay $102,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,000. January 30 Firework sales for the second half of the month total $155,000. Sales include $11,000 for cash and $144,000 on account. The cost of the units sold is $85,500. January 31 Pay cash for monthly salaries, $53,200. 5. Prepare a classified balance sheet as of January 31, 2021. (Enter the Asset Accounts in order of liquidity. Amounts to be deducted should be indicated with a minus sign.) ACME FIREWORKS Classified Balance Sheet January 31, 2021 Assets Liabilities Cash $ 6,200 86,700 $ 207,000 Accounts Receivable Less: Allowance for Uncollectible Accounts Inventory $ 19,100 Deferred Revenue Accounts Payable 207,000 Income Tax Payable 14,900 interest Payable 14,200 310 Total Current Assets 107,410 62,000 169,410 241,000 Total Current Liabilities Notes Payable Total Liabilities Stockholders' Equity Common Stock Retained Earnings Land 47,000 87,770 134,770 Total Stockho ers' Equity Total Liabilities and Stockholders' $ 241,000 Equity Total Assets $ 304,180