On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances:

6. Record closing entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

7. Analyze the following for ACME Fireworks

Requirement 1:

a-1. Calculate the current ratio at the end of January.

a-2. If the average current ratio for the industry is 1.80, is ACME Fireworks more or less liquid than the industry average?

• More liquid

• Less liquid

Requirement 2:

b-1. Calculate the acid-test ratio at the end of January.

b-2. If the average acid-test ratio for the industry is 1.50, is ACME Fireworks more or less likely to have difficulty paying its currently maturing debts (compared to the industry average)?

• More likely

• Less likely

Requirement 3:

c-1. Assume the notes payable were due on April 1, 2021, rather than April 1, 2022. Calculate the revised current ratio at the end of January.

adjusted trial balance:

Credit Debit $ 26,100 48,200 $ 5,200 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2022) Common Stock Retained Earnings Totals 21,000 56,000 20,000 2,500 29,500 60,000 45,000 29,100 $171,300 $171,300 During January 2021, the following transactions occur: January 2 Sold gift cards totaling $10,000. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $157,000. January 15 Firework sales for the first half of the month total $145,000. All of these sales are on account. The cost of the units sold is $78,800. January 23 Receive $126,400 from customers on accounts receivable. January 25 Pay $100,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $5,800. January 30 Firework sales for the second half of the month total $153,000. Sales include $16,000 for cash and $137,000 on account. The cost the units sold is $84,500. January 31 Pay cash for monthly salaries, $53,000. Adjusted Trial Balance January 31, 2021 Accounts Debit Credit Cash $ 25,500 Accounts Receivable 198,000 Allowance for Uncollectible Accounts 13,380 Inventory Land 14,700 56,000 20,000 3,150 Equipment Accumulated Depreciation Accounts Payable Notes Payable 86,500 60,000 6,000 Deferred Revenue 300 Interest Payable Income Tax Payable 14,000 Common Stock Retained Earnings 45,000 29,100 302,000 Sales Revenue Cost of Goods Sold 163,300 300 650 Interest Expense Depreciation Expense Bad Debt Expense Salaries Expense Income Tax Expense Totals 13,980 53,000 14,000 559,430 $ $ 559,430