On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: 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 of the units sold is $84,500. January 31 Pay cash for monthly salaries, $53,000. The following information is available on January 31. a. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a residual value of $4,400 and a two-year service life. b. The company estimates future uncollectible accounts. The company determines $21,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) C. Accrued Interest expense on notes payable for January. d. Accrued income taxes at the end of January are $14,000. e. By the end of January, $4,000 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold). 10 Jan 31 53,000 Salaries Expense Cash 53,000 11 Jan 31 650 Depreciation Expense Accumulated Depreciation 650 12 Jan 31 6,580 Bad Debt Expense Allowance for Uncollectible Accounts 6,580 13 Jan 31 300 Interest Expense Interest Payable 300 14 Jan 31 14,000 Income Tax Expense Income Taxes Payable 14,000 15 Jan 31 4,000 Deferred Revenue Sales Revenue 4,000 16 Jan 31 149,000 Sales Revenue Retained Earnings 149,000 17 Jan 31 Retained Earnings Cost of Goods Sold Salaries Expense Depreciation Expense Bad Debt Expense Interest Expense Income Tax Expense 163,300 53,000 650 300 14,000 Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Prepare an income statement for the period ended January 31, 2021. Choose the appropriate accou company's income statement. The unadjusted, adjusted, or post-closing balances will appear for ea selection. Post-closing ACME Fireworks Income Statement For the year ended January 31, 2021 Sales Revenue 302,000 Cost of Goods Sold 0 w $ 302,000 6,580 Gross profit Bad Debt Expense Depreciation Expense Salaries Expense Ooo 0 0 6,580 295,420 Total operating expenses Operating income Interest Expense Income Before Taxes 0 295,420 Net Income $ 295,420 *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. Using the information from the requirements above, complete the 'Analysis' tab. (Calculate the ratios to the nearest 1 decimal place.) Analyze the following for ACME Fireworks: (a) Calculate the current ratio at the end of January. If the average current ratio for the industry is 1.8, is ACME Fireworks more or less liquid than the industry average? The current ratio is: 2.4 X Is the company more or less liquid than the industry average? More (b) Calculate the acid-test ratio at the end of January. If the average acid-test ratio for the industry is 1.5, is ACME Fireworks more or less likely to have difficulty paying its currently maturing debts (compared to the industry average)? The acid-test ratio is: x Is the company more or less likely to have difficulty paying its currently maturing debts? Less C) 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, and indicate whether the revised ratio would increase, decrease, or remain unchanged compared to your answer in (a) The revised current ratio is x Indicate whether the revised ratio would increase, decrease, or remain unchanged compared to your answer in (a) Decrease