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

Accounts	Debit				Credit
Cash	$	26,700
Accounts Receivable		49,400
Allowance for Uncollectible Accounts					$	5,800
Inventory		21,600
Land		62,000
Equipment		23,000
Accumulated Depreciation						3,100
Accounts Payable						30,100
Notes Payable (6%, due April 1, 2022)						66,000
Common Stock						51,000
Retained Earnings						26,700
Totals	$	182,700			$	182,700

During January 2021, the following transactions occur:

January		2		Sold gift cards totaling $11,200. The cards are redeemable for merchandise within one year of the purchase date.
January		6		Purchase additional inventory on account, $163,000.
January		15		Firework sales for the first half of the month total $151,000. All of these sales are on account. The cost of the units sold is $81,800.
January		23		Receive $127,000 from customers on accounts receivable.
January		25		Pay $106,000 to inventory suppliers on accounts payable.
January		28		Write off accounts receivable as uncollectible, $6,400.
January		30		Firework sales for the second half of the month total $159,000. Sales include $13,000 for cash and $146,000 on account. The cost of the units sold is $87,500.
January		31		Pay cash for monthly salaries, $53,600.

Prepare an adjusted trial balance as of January 31, 2021.

ACME Fireworks

Adjusted Trial Balance

January 31, 2021

Accounts	Debit	Credit

Journal entry worksheet

1. Record the closing entry for revenue accounts

2. Record the closing entry for expense accounts

3. Calculate the current ratio at the end of January

Current Ratio

Choose Numerator	/	Choose Denominator	=	Current Ratio
	/		=	Current Ratiof
	/		=

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

A. More liquid

B. Less liquid

5. Calculate the acid-test ratio at the end of January

Acid-test Ratio

Choose Numerator	/	Choose Denominator	=	Acid-test Ratio
	/		=	Acid-test Ratio
	/		=

6. 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)?

A. More likely

B. Less likely

7. 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.

Current Ratio

Choose Numerator	/	Choose Denominator	=	Current Ratio
	/		=	Current Rato
	/		=	times

8. Indicate whether the revised ratio would increase, decrease, or remain unchanged.

A. Decrease the current ratio

B. Increase the current ratio

C. Remain unchanged