On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Accounts Debit Credit Cash $ 25,100; Accounts Receivable 46,200; Allowance for Uncollectible Accounts 4,200; Inventory 20,000; Notes Receivable (6%, due April 1, 2022) 50,000; Equipment $15,000; Land 46,000; Accounts Payable 28,500; Common Stock 35,000; Retained Earning 33,100; Totals $ 152,300 $ 152,300 During January 2021, the following transactions occur: January 2.Sold gift cards totaling $8000. The cards are redeemable for merchandise within one year of the purchase date. January 4. Pay cash on accounts payable, $10,800. January 8. Purchase additional inventory on account, $95,900. January 15. Receive cash on accounts receivable, $23,300

January 6. Purchase additional inventory on account $147,000; January 15. Firework sales for January total $135,000. All of these sales are on account. The cost of the units sold is $73,800.; January 23. Receive $125,400 from customers on accounts receivable.; January 25. Pay $90,000 to inventory suppliers on accounts payable.; January 28. Write off accounts receivable as uncollectible, $4800. ; January 30. Firework sales for the second half of the month total $143,000. Sales include $11,000 for cash and $132,000 on account. The cost of the units sold is $79,500. ; January 31. Pay cash for monthly salaries, $52,000. ; 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 $3,000 and a two-year service life.

1. The company estimates future uncollectible accounts. The company determines $11,000 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 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)

2. Accrued interest expense on notes payable for January.

3. Accrued income taxes at the end of January are $13,000.

4. By the end of January, $3,000 of the gift cards sold on January 2 have been redeemed.

1. Record each of the transactions listed above.

2. Record the adjusting entries on January 31 for the above transactions.

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

4. Prepare a multiple-step income statement for the period ended January 31, 2021

5. Prepare a classified balance sheet as of January 31, 2021.

6. Record closing entries.

7. Analyze how well TNT Fireworks manages its assets:

Analyze the following for ACME Fireworks Requirement 1:

a-1. 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?

• More liquid

• Less liquid

Requirement 2:

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