On January 1, 2021, the general ledger of 3D Family Fireworks Includes the following account balances: Accounts Debit Credit cash $ 28,300 Accounts Receivable 14,703 Allowance for Uncollectible Accounts $ 1,803 Supplies 3,108 Notes Receivable (6%, due in 2 years) 24,808 Land 59,800 Accounts Payable 5,700 Common Stock 75,900 Retained Earnings 48,080 Totals $129,908 $131, 400 During January 2021, the following transactions occur. 1. January 2 Provide services to customers for cash, $30,700. January 6 Provide services to customers on account, $79, 100. 3. January 15 Write off accounts receivable as uncollectible, $1, 160. January 20 pay cash for salaries, $34,400. 5. January 22 Receive cash on accounts receivable, $76,703. 6. January 25 Pay cash on accounts payable, $4, 250. 7. January 30 pay cash for utilities during January, $10, 600. The following Information is available on January 31, 2021. 8. At the end of January, $3,900 of accounts receivable are past due, and the company estimates that 10% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 5% will not be collected. The note receivable of $19,000 is considered fully collectible and therefore is not Included In the estimate of uncollectible accounts. 9. Supplies at the end of January total $710. 10. Accrued Interest revenue on notes receivable for January. Interest is expected to be received each December 31. 11. Unpaid salaries at the end of January are $31,000.x Answer is not complete. Requirement General General Trial Balance Income Journal Ledger Statement Balance Sheet Analysis Using the information from the requirements above, complete the Analysis tab. (Enter your Accounts receivable turnover ratio in 1 decimal place and Ratio of allowance for uncollectible accounts in whole number.) Post-closing Dates: Jan 02 to: Jan 31 Analyze how well 3D Family Fireworks manages its receivables (a) Calculate the receivables turnover ratio for the month of January (Hint: For the numerator, use total services provided to customers on account). If the industry average of the receivables turnover ratios for the month of January is 4.2 times, is the company collecting cash from customers more or less efficiently than other companies in the same industry? Accounts Receivable turnover: 5.2 x times The company is collecting more efficiently. (true or false) True (b) Calculate the ratio of Allowance for Uncollectible Accounts to Accounts Receivable at the end of January. Based on a comparison of this ratio to the same ratio at the beginning of January, does the company expect an improvement or worsening in cash collections from customers on credit sales? Ratio of Allowance for Uncollectible Accounts to Accounts Receivable % Should the company expect improving or worsening conditions? Improving
