On January 1, 2021, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Accounts Payable Notes Payable (6%, due in 3 years) Common Stock Retained Earnings Totals Debit Credit $ 22,100 37,000 $ 3,300 31,000 63,100 31,900 31,000 57,000 30,000 $153,200 $153,200 The $31,000 beginning balance of inventory consists of 310 units, each costing $100. During January 2021, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,000 units for $106,000 on account ($106 each). January 8 Purchase 1,100 units for $122,100 on account ($111 each). January 12 Purchase 1,200 units for $139,200 on account ($116 each). January 15 Return 105 of the units purchased on January 12 because of defects. January 19 Sell 3,400 units on account for $544,000. The cost the units sold is determined using a FIFO perpetual inventory system. January 22 Receive $489,000 from customers on accounts receivable. January 24 Pay $319,000 to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $2,600. January 31 Pay cash for salaries during January, $115,000. The following information is available on January 31, 2021. a. At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $100 each. b. The company estimates future uncollectible accounts. The company determines $4,100 of accounts receivable on January 31 are past due, and 45% 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.) c. Accrued interest expense on notes payable for January. Interest is expected to be paid each December 31. d. Accrued income taxes at the end of January are $12,400. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Date Account Title Debit Credit 1 Jan 03 106,000 Inventory Accounts Payable 106,000 2 Jan 08 122,100 Inventory Accounts Payable 122.100 3 Jan 12 139.200 Inventory Accounts Payable 139,200 4 Jan 15 12,180 Accounts Payable Inventory 12,180 5 Jan 19 544,000 Accounts Receivable Sales Revenue 544,000 6 Jan 19 372.300 Cost of Goods Sold Inventory 372,300 7 Jan 22 Cash 489,000 Accounts Receivable 489,000 8 Jan 24 319,000 Accounts Payable Cash 319,000 9 9 Jan 27 2,600 Allowance for Uncollectible Accounts Accounts Receivable 2,600 9 Jan 27 2,600 Allowance for Uncollectible Accounts Accounts Receivable 2,600 10 Jan 31 115,000 Salaries Expense Cash 115,000 11 Jan 31 2,700 Cost of Goods Sold Inventory 2,700 12 Jan 31 2,560 Bad Debt Expense Allowance for Uncollectible Accounts 2,560 13 Jan 31 Interest Expense Interest Payable 14 Jan 31 12,400 Income Tax Expense Income Taxes Payable 12,400 15 Jan 31 Sales Revenue Retained Earnings 30,000 16 Jan 31 115,000 Cost of Goods Sold Salaries Expense Bad Debt Expense Interest Expense Income Tax Expense 12,400 Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Using the information from the requirements above, complete the 'Analysis' tab. Enter your Inventory Turnover ratio and gross profit ratio value in one decimal place. Analyze how well Big Blast Fireworks' manages its inventory: (a) Calculate the inventory turnover ratio for the month of January. If the industry average of the inventory turnover ratio for the month of January is 18 times, is the company managing its inventory more or less efficiently than other companies in the same industry? The inventory turnover ratio is: times The company managing its inventory more efficiently. (True or False) (b) Calculate the gross profit ratio for the month of January. If the industry average gross profit ratio is 34%, is the company more or less profitable per dollar of sales than other companies in the same industry? The gross profit ratio is % Is the company more or less profitable per dollar of sales? (c) Used together, what might the inventory turnover ratio and gross profit ratio suggest about Big Blast Fireworks' business strategy? Is the company's strategy to sell a higher volume of less expensive items or does the company appear to be selling a lower volume of more expensive items? Based on the inventory turnover ratio and the gross profit ratio, Big Blast Fireworks' business strategy appears to be selling a