On January 1, 2018, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Debit Credit Cash $ 23,100 Accounts Receivable 39,500 Inventory 36,000 Land 70,600 Allowance for Uncollectible Accounts 4.300 Accounts Payable 29,400 Notes Payable (8%, due in 3 years) 36,000 Common Stock 62,000 Retained Earnings 37,500 Totals $ 169,200 $ 169,200 The $36,000 beginning balance of inventory consists of 360 units, each costing $100. During January 2018, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,500 units for $156,000 on account ($104 each). January 8 Purchase 1,600 units for $174,400 on account ($109 each). January 12 Purchase 1,700 units for $193,800 on account ($114 each). January 15 Return 130 of the units purchased on January 12 because of defects. January 19 Sell 4,900 units on account for $735,000. The cost of the units sold is determined using a FIFO perpetual inventory system. January 22 Receive $709,000 from customers on accounts receivable. January 24 Pay $500,000 to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $3,100. January 31 Pay cash for salaries during January, $120,000. The following information is available on January 31, 2018. 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 $4,600 of accounts receivable on January 31 are past due, and 30% 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.) 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 $12,900. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis 1. Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 - 10) assuming a FIFO perpetual inventory system. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances. 2. Record adjusting entries on January 31. in the 'General Journal' tab (these are shown as items 11-14). 3. Review the adjusted 'Trial Balance' as of January 31, 2018, in the 'Trial Balance' tab. 4. Prepare a multiple-step income statement for the period ended January 31, 2018, in the 'Income Statement' tab. 5. Prepare a classified balance sheet as of January 31, 2018, in the 'Balance Sheet' tab. 6. Record the closing entries in the 'General Journal' tab these are shown as items 15 and 16). 7. Using the information from the requirements above, complete the 'Analysis' tab. Purchase 1,500 units for $156,000 on account ($104 each). Note: Enter debits before credits. Date Account Title Debit Credit Jan 03 Record entry Clear entry View general journal Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Unadjusted General Ledger Account Cash Accounts receivable Debit Credit No. Debit Credit No. Date Dec 31 Balance 23,100 Date Dec 31 Balance 39,500 Allowance for uncollectible accounts Date Debit Credit Dec 31 Inventory Debit No. No. Credit Balance 4,300 Date Dec 31 Balance 36,000 Land Accounts payable No. Debit Credit No. Debit Credit Date Dec 31 Balance 70.600 Date Dec 31 Balance 29,400 Notes payable Common stock Debit Credit No. Debit Credit No. Date Dec 31 Balance 36,000 Date Dec 31 Balance 62,000 Retained earnings Debit Credit No. No. Date Dec 31 Deci Balance 37,500 Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Notice the dropdown below that gives the options to select the unadjusted, adjusted or post-closing trial balance. The option you choose will be the values used to populate the income statement and balance sheet tabs. Review the adjusted 'Trial Balance' as of January 31, 2018 Unadjusted Big Blast Fireworks Trial Balance January 31, 2018 Account Title Credit $ Debit 23,100 39,500 4,300 36,000 70,600 Cash Accounts receivable Allowance for uncollectible accounts Inventory Land Accounts payable Notes payable Common stock Retained earnings Total 29,400 36,000 62,000 37,500 169,200 $ 169,200 $ Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Choose the appropriate accounts to complete the company's income statement. Select 'adjusted' from the dropdown, which will then populate the balances in those accounts from the adjusted trial balance. Unadjusted Big Blast Fireworks Multiple-Step Income Statement For the year ended January 31, 2018 Gross profit Total operating expenses Operating income Income before taxes Requirement Journal Ledger Ilal Balance Balance Sheet Analysis Statement Make sure to select 'Post-closing' from the dropdown, which will then populate the balances in those accounts from the post- closing trial balance. Unadjusted Big Blast Fireworks Classified Balance Sheet January 31, 2018 Assets Liabilities Current Assets Current Liabilities: Total Current Liabilities Total Current Assets Total Liabilities Noncurrent Assets: Stockholders' Equity Total Stockholders' Equity Total Liabilities & Stockholders' Equity Total Assets Enter your Inventory Turnover ratio and gross profit ratio value in one decimal place. Analyze how well Big Blast Fireworks' manages its inventory: (a) Calculate the inventory turnover ratio for the month of January. If the industry average of the inventory turnover ratio for the month of January is 19.4 times, is the company managing its inventory more or less efficiently than other companies in the same industry? The inventory turnover ratio is: times The company managing its inventory more efficiently. (True or False) (b) Calculate the gross profit ratio for the month of January. If the average gross profit ratio is 36%, is the company more or less profitable per dollar of sales than other companies in the same industry? The gross profit ratio is: Is the company more or less profitable per dollar of sales? (c) Used together, what might the inventory turnover ratio and gross profit ratio suggest about Big Blast Fireworks' business strategy? Is the company's strategy to sell a higher volume of less expensive items or does the company appear to be selling a lower volume of more expensive items? Based on the inventory turnover ratio and the gross profit ratio, Big Blast Fireworks' business strategy appears to be selling a On January 1, 2018, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Debit Credit Cash $ 23,100 Accounts Receivable 39,500 Inventory 36,000 Land 70,600 Allowance for Uncollectible Accounts 4.300 Accounts Payable 29,400 Notes Payable (8%, due in 3 years) 36,000 Common Stock 62,000 Retained Earnings 37,500 Totals $ 169,200 $ 169,200 The $36,000 beginning balance of inventory consists of 360 units, each costing $100. During January 2018, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,500 units for $156,000 on account ($104 each). January 8 Purchase 1,600 units for $174,400 on account ($109 each). January 12 Purchase 1,700 units for $193,800 on account ($114 each). January 15 Return 130 of the units purchased on January 12 because of defects. January 19 Sell 4,900 units on account for $735,000. The cost of the units sold is determined using a FIFO perpetual inventory system. January 22 Receive $709,000 from customers on accounts receivable. January 24 Pay $500,000 to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $3,100. January 31 Pay cash for salaries during January, $120,000. The following information is available on January 31, 2018. 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 $4,600 of accounts receivable on January 31 are past due, and 30% 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.) 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 $12,900. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis 1. Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 - 10) assuming a FIFO perpetual inventory system. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances. 2. Record adjusting entries on January 31. in the 'General Journal' tab (these are shown as items 11-14). 3. Review the adjusted 'Trial Balance' as of January 31, 2018, in the 'Trial Balance' tab. 4. Prepare a multiple-step income statement for the period ended January 31, 2018, in the 'Income Statement' tab. 5. Prepare a classified balance sheet as of January 31, 2018, in the 'Balance Sheet' tab. 6. Record the closing entries in the 'General Journal' tab these are shown as items 15 and 16). 7. Using the information from the requirements above, complete the 'Analysis' tab. Purchase 1,500 units for $156,000 on account ($104 each). Note: Enter debits before credits. Date Account Title Debit Credit Jan 03 Record entry Clear entry View general journal Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Unadjusted General Ledger Account Cash Accounts receivable Debit Credit No. Debit Credit No. Date Dec 31 Balance 23,100 Date Dec 31 Balance 39,500 Allowance for uncollectible accounts Date Debit Credit Dec 31 Inventory Debit No. No. Credit Balance 4,300 Date Dec 31 Balance 36,000 Land Accounts payable No. Debit Credit No. Debit Credit Date Dec 31 Balance 70.600 Date Dec 31 Balance 29,400 Notes payable Common stock Debit Credit No. Debit Credit No. Date Dec 31 Balance 36,000 Date Dec 31 Balance 62,000 Retained earnings Debit Credit No. No. Date Dec 31 Deci Balance 37,500 Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Notice the dropdown below that gives the options to select the unadjusted, adjusted or post-closing trial balance. The option you choose will be the values used to populate the income statement and balance sheet tabs. Review the adjusted 'Trial Balance' as of January 31, 2018 Unadjusted Big Blast Fireworks Trial Balance January 31, 2018 Account Title Credit $ Debit 23,100 39,500 4,300 36,000 70,600 Cash Accounts receivable Allowance for uncollectible accounts Inventory Land Accounts payable Notes payable Common stock Retained earnings Total 29,400 36,000 62,000 37,500 169,200 $ 169,200 $ Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Choose the appropriate accounts to complete the company's income statement. Select 'adjusted' from the dropdown, which will then populate the balances in those accounts from the adjusted trial balance. Unadjusted Big Blast Fireworks Multiple-Step Income Statement For the year ended January 31, 2018 Gross profit Total operating expenses Operating income Income before taxes Requirement Journal Ledger Ilal Balance Balance Sheet Analysis Statement Make sure to select 'Post-closing' from the dropdown, which will then populate the balances in those accounts from the post- closing trial balance. Unadjusted Big Blast Fireworks Classified Balance Sheet January 31, 2018 Assets Liabilities Current Assets Current Liabilities: Total Current Liabilities Total Current Assets Total Liabilities Noncurrent Assets: Stockholders' Equity Total Stockholders' Equity Total Liabilities & Stockholders' Equity Total Assets Enter your Inventory Turnover ratio and gross profit ratio value in one decimal place. Analyze how well Big Blast Fireworks' manages its inventory: (a) Calculate the inventory turnover ratio for the month of January. If the industry average of the inventory turnover ratio for the month of January is 19.4 times, is the company managing its inventory more or less efficiently than other companies in the same industry? The inventory turnover ratio is: times The company managing its inventory more efficiently. (True or False) (b) Calculate the gross profit ratio for the month of January. If the average gross profit ratio is 36%, is the company more or less profitable per dollar of sales than other companies in the same industry? The gross profit ratio is: Is the company more or less profitable per dollar of sales? (c) Used together, what might the inventory turnover ratio and gross profit ratio suggest about Big Blast Fireworks' business strategy? Is the company's strategy to sell a higher volume of less expensive items or does the company appear to be selling a lower volume of more expensive items? Based on the inventory turnover ratio and the gross profit ratio, Big Blast Fireworks' business strategy appears to be selling a