On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Credit Debit $ 59,900 27,400 $ 3,400 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 37,500 26,400 167,000 16,000 232,000 66,800 $318,200 $318,200 During January 2021, the following transactions occur: January 1 Purchase equipment for $20,700. The company estimates a residual value of $2,700 and a six-year service life. January 4 Pay cash on accounts payable, $10,700. January 8 Purchase additional inventory on account, $ 94,900. January 15 Receive cash on accounts receivable, $23,200. January 19 Pay cash for salaries, $31,000. January 28 Pay cash for January utilities, $17,700. January 30 Sales for January total $232,000. All of these sales are on account. The cost of the units sold is $121,000. The following information is available on January 31, 2021. a. Depreciation on the equipment for the month of January is calculated using the straight-line method. b. The company estimates future uncollectible accounts. The company determines $4,200 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) c. Accrued interest revenue on notes receivable for January. d. Unpaid salaries at the end of January are $33,800. e. Accrued income taxes at the end of January are $10,200. Require... General General Trial Income Balance Analysis | Journal | Ledger Balance Statem... Sheet Record each of the transactions listed above in the 'General Journal' tab (these are * shown as items 1 - 8) assuming a FIFO perpetual inventory system. The transaction on January 30 requires two entries: one to record sales revenue and one to record cost of goods sold. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances. Record adjusting entries on January 31 in the 'General Journal' tab (these are shown as 2 items 9-13). 3. Review the adjusted 'Trial Balance' as of January 31, 2021, in the 'Trial Balance' tab. Prepare a multiple-step income statement for the period ended January 31, 2021, in the 'Income Statement' tab. 5. Prepare a classified balance sheet as of January 31, 2021, in the 'Balance Sheet' tab. Record the closing entries in the 'General Journal' tab these are shown as items 14 and 6. 15). 7. Using the information from the requirements above, complete the 'Analysis' tab. Require... General General Journal Ledger Trial Balance Income Balance Statem... | Sheet Analysis Prepare the journal entries for transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Purchase additional inventory on account, $94,900. Note: Enter debits before credits. Credit Date Jan 08 General Journal Inventory .......................... Debit 94,900 94,900 Record entry View general journal Clear entry General General Trial Income Balance Require... Analysis || Journal Ledger Balance Statem... |Sheet Prepare the journal entries for transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Receive cash on accounts receivable, $23,200 Note: Enter debits before credits. General Journal | Debit Credit Date Jan 15 Record entry View general journal Clear entry Dawin | General | General | Trial | Income || Balance Journal Ledger Balance Statem... | Sheet Analysis Prepare the journal entries for transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Dawin | General | General | Trial | Income || Balance Journal Ledger Balance Statem... | Sheet Analysis Prepare the journal entries for transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Require... *** General General | Journal Ledger Trial Balance Income Statem... | Balance Sheet Analysis Prepare the journal entries for transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet General General | Trial Income Balance Require... Analysis Journal Ledger Balance Statem... Sheet Prepare the journal entries for transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet General General Trial Income Balance Require... Analysis | Journal Ledger Balance Statem... |Sheet Each journal entry is posted automatically to the general ledger. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. Unadjust General Ledger Account Cash No. Debit No. Date Jan 01 Jan 04 Jan 19 Jan 28 Accounts Receivable Date Debit Credit Jan 01 Jan 30 | 232,000 Credit Balance | 59,900 10,700 49,200 31,000 18,200 17,700 500 Balance 27,400 259,400 2 5 6 7 Allowance for Uncollectible Accounts No. Date Debit Credit Balance Jan 01 3,400 Notes receivable Debit | Credit No. Date Jan 01 Balance 26,400 Inventory Land No. Debit Credit No. Debit Credit Date Jan 01 | Balance 167,000 Date Jan 01 Jan 08 Jan 30 Balance 37,500 132,400 11,400 94,900 3 8 121,000 Common Stock Debit | Credit No. Accounts Payable Date Debit Credit Jan 01 Jan 04 10,700 No. Balance 16,000 5,300 Date Jan 01 Balance 232,000 2 Sales Revenue Debit Credit No. Retained Earnings Date Debit Credit Jan 01 No. Date Balance 66,800 Balance 0 232,000 7 Jan 30 232,000 Salaries Expense Debit Credit No. Cost of Goods Sold Date Debit Credit Jan 01 Jan 30 | 121,000 Balance No. Balance Date Jan 01 Jan 19 8 121,000 5 31,000 31,000 Utilities Expense Debit Credit No. Date Jan 01 Jan 28 Balance 0 17,700 6 17,700 General General Trial Income Balance Require... || Journal | Ledger | Balance Statem... | Sheet | Analysis Notice the dropdown below that gives the options to select the unadjusted, adjusted or post-closing trial balance. The option you choose will be the values used to populate the income statement and balance sheet tabs. Show less Unadjust TNT FIREWORKS Trial Balance January 30, 2021 Account Title Debit Credit Cash 500 Accounts Receivable 259,400 Allowance for Uncollectible Accounts 3,400 Notes receivable 26,400 Inventory 11,400 Land 167,000 Accounts Payable 5,300 Common Stock 232,000 Retained Earnings 66,800 Sales Revenue 232,000 Cost of Goods Sold 121,000 Salaries Expense 31,000 Utilities Expense 17,700 Total 634,400 $ 539,500 General General Require... | Journal | Ledger Trial Balance Income Balance Statem... || Sheet Analysis Choose the appropriate accounts to complete the company's income statement. Select 'adjusted' from the dropdown, which will then populate the balances in those accounts from the adjusted trial balance. Show less Unadjust TNT FIREWORKS Multiple-Step Income Statement For the year ended January 31, 2021 Gross profit $ 0 a 0 Total operating expenses Operating income 0 Trial Balance Balance Sheet > Require. General General Journal | Ledger Trial Balance Income Balance Statem... Sheet Analysis Choose the appropriate accounts to complete the company's balance sheet. Make sure to select 'adjusted' from the dropdown, which will then populate the balances in those accounts from the adjusted trial balance. Show less Unadjust TNT FIREWORKS Balance Sheet January 31, 2021 Assets Liabilities Current Assets: Current Liabilities: Total Current Liabilities Total Current Assets 0 Total Liabilities Noncurrent Assets: Stockholders' Equity Total Stockholders' Equity Total Liabilities & Stockholders' Equity Total Assets Require... General General Trial Income Balance Analysis Journal | Ledger Balance Statem... || Sheet Using the information from the requirements above, complete the 'Analysis' tab. (Round final answers to 1 decimal place.) Analyze how well TNT Fireworks manages its assets: |(a) Calculate the return on assets ratio for the month of January. If the average return on assets for the industry in January is 2%, is the company more or less profitable than other companies in the same industry? The return on assets ratio is: The company is more profitable. (True or False) (b) Calculate the profit margin for the month of January. If the industry average profit margin is 5%, is the company more or less efficient at converting sales to profit than other companies in the same industry? The profit margin is: lo The company is more efficient at converting sales to profit. (True or False) (c) Calculate the asset turnover ratio for the month of January. If the industry average asset turnover is 0.4 times per month, is the company more or less efficient at producing revenues with its assets than other companies in the same industry? The asset turnover ratio is: times The company is more efficient at producing revenues with its assets. (True or False)
