On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances Debit Credit $24,900 14,100 Accounts Cash Accounts Receivable Al lowance for Lhcol lect ible Accounts Suppl ies Notes Receivable (6%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings $ 1,800 3,000 25, 000 77,500 8,800 01,000 32,900 Tota ls $144,500 $144,500 During January 2021, the following transactions occur: January 2 Provide services to customers for cash, $40, 100 January 6 Provide services to customers on account, $77,400 January 15 Write off accounts receivable as uncollectible, $1,400 January 20 Pay cash f January 22 Receive cash on accounts receivable, $75,000 January 25 Pay cash on accounts payable, $6,000 January 30 Pay cash for utilities during January, $14,200 or salaries, $31,900 The following information is available on January 31, 2021. a. The company estimates future uncollectible accounts. The company determines $5,500 of accounts receivable on January 31 are past due, and 20% 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.) b. Supplies at the end of January total $950 c. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31 d. Unpaid salaries at the end of January are $34,000 Answer is not complete. General General Income Requirement StatementBalance Sheet Analysis Ledger Journal Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Require d" in the first account field.) Date Credit No General Journal Debit Jan 02, 2021 Cash 40,100 Service Revenue 40,100 77,400 Jan 06, 2021 Accounts Receivable Service Revenue 77,400 Jan 15, 2021 Allowance for Uncollectible Accounts 1,400 Accounts Receivable 1,400 Jan 20, 2021Salaries Expense 31,900 Cash 31,900 Jan 22, 2021 Cash 75,000 Accounts Receivable 75,000 Jan 25, 2021 Accounts Payable 6,000 Cash 6,000 14,200 Jan 30, 2021 Utilities Expense Cash 14,200 Jan 31, 2021 Bad Debt Expense Allowance for Uncollectible Accounts Answer is not complete. General Trial BalaceStatement Ledger Income Balance SheetAnalysis General Requirement Journal Enter your Accounts Receivable turnover value in 1 decimal place and Ratio of Allowance for Uncollectible Accounts in Whole number. 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 4.4 times, is the company collecting cash from customers more or less efficiently than other companies in the same industry? Accounts Receivable turnover times The company is collecting more efficiently. (true or (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
