O Required information [The following information applies to the questions displayed below.] On January 1, Year 1, the general ledger of a company includes the following account balances: Credit Debit $ 26,800 49,600 $ 5,900 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, Year 2) Common Stock Retained Earnings Totals 21,700 63,000 23,500 3,200 30, 200 67,000 52,000 26,300 $184,600 $184,600 During January Year 1, the following transactions occur: January 2 Sold gift cards totaling $11,400. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $164,000. January 15 The comapany sales for the first half of the month total $152,000. All of these sales are on account. The cost of the units sold is $82,300. January 23 Receive $127,100 from customers on accounts receivable. January 25 Pay $107,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,500. January 30 The comapany sales for the second half of the month total $160,000. Sales include $11,000 for cash and $149,000 on account. The cost of the units sold is $88,000. January 31 Pay cash for monthly salaries, $53,700. 7. Analyze the following for the company Requirement 1: a-1. Calculate the current ratio at the end of January. Current Ratio Current Ratio Choose Numerator Choose Denominator = Current Assets + Current Liabilities $ 230,150 + $ 108,935 = = Current Ratio 2.11 a-2. If the average current ratio for the industry is 1.80, is the company more or less liquid than the industry average? More liquid O Less liquid Requirement 2: b-1. Calculate the acid-test ratio at the end of January. Acid-test Ratio Choose Numerator - Acid-test Ratio Choose Denominator = - Current Liabilities Quick Assets Acid-test Ratio 0 b-2. If the average acid-test ratio for the industry is 1.50, is the company more or less likely to have difficulty paying its currently maturing debts (compared to the industry average)? O More likely Less likely Requirement 3: C-1. Assume the notes payable were due on April 1, Year 1, rather than April 1, Year 2. Calculate the revised current ratio at the end of January. Current Ratio Choose Numerator Current Assets Choose Denominator + Current Liabilities Current Ratio Current Ratio 230,150 - 0 times c-2. Indicate whether the revised ratio would increase, decrease, or remain unchanged. Decrease the current ratio Increase the current ratio Remain unchanged