On January 1, 2018, the general ledger of Parts Unlimited includes the following account balances: Debit Credit Accounts Cash Accounts Receivable Inventory Land Equipment Accumulated depreciation Accounts Payable Common stock Retained Earnings $ 182,488 32,488 57,888 368,808 396,588 $ 192,e0 34,88 548,8ee 262,30e Totals $1,829,188 $1,829,18e From January 1 to December 31, the following summary transactions occur Purchased inventory on account, $345,800. a. Sold inventory on account, $645,200. The inventory cost $362,600. b. Received cash from customers on account, $578,700. c. Paid cash on account, $348.500. d. Paid cash for salaries, $114,700, and for utilities, $72,700. In addition, Parts Unlimited had the following transactions during the year: April 1 Purchased equipment for $115,000 using a note payable, due in 12 months plus 8% interest. The company also paid cash of $5,288 for freight and $5, 880 for installation and testing of the equipment. The equipment has an estimated residual June 38 Purchased a patent for $68,8e from a third-party marketing company related to the packaging of the company's products October 1 Sold equipment for $52,280. The equipment cost $88,78 and had accumulated depreciation of $57,480 at the beginning of November 15 Several older pieces of equipment were improved by replacing major components at a cost of $74,18e. These improvements value of $16,88e and a ten-year service life The patent has a 28-year useful life, after which it is expected to have no value the year. Additional depreciation for 2818 up to the point of the sale is $18,588 are expected to enhance the equipment's operating capabilities. [Record this transaction using Alternative 2 - capitalization of new cost. Year-end adjusting entries: a. Depreciation on the equipment purchased on April 1. 2018, calculated using the straight-line method. b. Depreciation on the remaining equipment, $41,500. c. Amortization of the patent purchased on June 30, 2018, using the straight-line method. d. Accrued interest payable on the note payable. e. Equipment with an original cost of $87.400 had the following related information at the end of the year: accumulated depreciation of $56,300, expected cash flows of $35,700, and a fair value of $20,800. f. Accrued income taxes at the end of the year are $32,600. General Requirement Journal General Ledger Trial Balance Inc Balance Sheet Analysis Record each of the transactions listed above in the General Journal tab (these are shown as items 1-13) assuming a 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 December 31. In the 'General Journal' tab (these are shown as items 14-17) 3. Review the adjusted Trial Balance' as of December 31, 2018, in the 'Trial Balance tab. 4. Prepare a multiple-step income statement for the period ended December 31, 2018, in the Income Statement' tab. 5. Prepare a classified balance sheet as of December 31, 2018, in the Balance Sheet tab. 6. Record the closing entries in the 'General Journal' tab (these are shown as items 18-20) 7. Using the information from the requirements above, complete the 'Analysis' tab. Using the information from the requirements above, complete the 'Analysis'. (Round final answers to two decimal places.) Analyze how well TNT Fireworks manages its assets: (a) Calculate the fixed asset turnover ratio for the year, using all long-term assets. If the industry average fixed asset turnover is 0.75, is the company more or less efficient at generating sales with its fixed assets than other companies in the same industry? The fixed asset turnover ratio is The company is more efficient managing its inventory. (True or False) (b) Suppose the equipment purchased on April 1, 2018, had been depreciated using the units of production method. At the time of purchase, expected output was 25,000 units, and actual production for 2018 was 3,000 units. Calculate the amount of depreciation expense that would have been recorded and determine the difference in income and total assets for 2018 lignoring tax effects). Units-of-production depreciation: Depreciation expense under units-of-production method is higher. (True or False) Income and total assets in 2018 would have been (c) The costs of internally developed patents are recorded as research and development expense in the period incurred. The cost of an externally purchased patent is capitalized and then amortized over the remaining life of the patent. The difference for 2018 is calculated as: Additional expense for 2018 The income and total assets in 2018 would have been higher. (True or False)