On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances: Credit Debit $ 24,700 14,000 $ 1,600 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Supplies Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 2,900 24,000 77,400 8,600 100,000 32,800 $ 143,000 $ 143,000 During January 2021, the following transactions occur: January 2 Provide services to customers for cash, $39,100. January 6 Provide services to customers on account, $ 76,400. January 15 Write off accounts receivable as uncollectible, $1,400. January 20 Pay cash for salaries, $31,800. January 22 Receive cash on accounts receivable, $ 74,000. January 25 Pay cash on accounts payable, $5,900. January 30 Pay cash for utilities during January, $14,100. The following information is available on January 31, 2021. a. The company estimates future uncollectible accounts. The company determines $5,400 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 $900. 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 $33,900. No Date General Journal Debit Credit 1 Jan 02, 2021 Cash 39,100 Service Revenue 39,100 2 Jan 06, 2021 76,400 o Accounts Receivable Service Revenue 76,400 3 Jan 15, 2021 1,400 0 Allowance for Uncollectible Accounts Accounts Receivable 1,400 4 Jan 20, 2021 31,800 Salaries Expense Cash 31,800 5 Jan 22, 2021 Cash 74,000 Accounts Receivable 74,000 6 Jan 25, 2021 Accounts Payable 5,900 Cash 5,900 7 Jan 30, 2021 14,100 Utilities Expense Cash 14,100 8 Jan 31, 2021 1,360 Bad Debt Expense Allowance for Uncollectible Accounts 1,360 9 Jan 31, 2021 2,000 Supplies Expense Supplies Jool 2,000 10 Jan 31, 2021 100 Interest Receivable Interest Revenue 100 11 Jan 31, 2021 33,900 Salaries Expense Salaries Payable 33,900 12 Jan 31, 2021 Service Revenue Interest Revenue 115,500 100 13 Jan 31, 2021 x Salaries Expense Utilities Expense Supplies Expense Bad Debt Expense 65,700 X 14,100 1,360 X 2,000 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 4.3 times, is the company collecting cash from customers more or less efficiently than other companies in the same industry? Accounts Receivable turnover: 10.2 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 % 10 Should the company expect improving or worsening conditions? Improving