On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances Credit Debit $ 58,900 25,40e $ 2,400 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 36,500 14.400 157, see 15, eee 222,eee 52.ee $292,200 $292,200 During January 2021, the following transactions occurred: January 1 Purchased equipment for $19,700. The company estimates a residual value of $1,700 and a five- year service life. January 4 Paid cash on accounts payable, 59,700. January 8 Purchased additional inventory on account, $84,900. January 15 Received cash on accounts receivable, $22,200 January 19 Paid cash for salaries, $30,000. January 28 Paid cash for January utilities, 516,700. January 30 Firework sales for January totaled $222,000. All of these sales were on account. The cost of the units sold was $116,000. Journal entry worksheet 1 2 3 4 5 6 7 8 ..... 15 > Record the purchase of equipment for $19,700. The company estimates a residual value of $1,700 and a five-year service life. Note: Enter debits before credits Date General Journal Debit Credit Jan 01 Record entry Clear entry View general journal General Ledger Account Cash Accounts receivable Jan 01 58.900 Jan 01 25,400 Allowance for uncollectible accounts Date Debit Credit Notes receivable Debit Credit Balance Date Balance 14.400 Jan 01 2400 Inventory Land Jan 01 500 Jan 01 157 000 Accounts payable Common stock Date Debit Credit Balance Date Debi Credit Balance Jan 01 15 000 222.000 Retained earnings Debit Credit Balance HO TNT Fireworks Trial Balance January 30, 2021 Account Title Debit Credit Acash 58 900 25,400 Accounts receivable Allowance for uncollectible accounts Notes receivable 14,400 36,500 157,000 inventory Land Accounts payable Common stock Retained earnings Total 15,000 222.000 52,800 292 200 $ Unadjusted - TNT Fireworks Multiple-Step Income Statement For the year ended January 31, 2021 Gross profit Total operating expenses Operating income TNT Fireworks Balance Sheet January 31, 2021 Assets Liabilities Current sets Current liabilties Total current liabilities Total current assets Total liabilities Noncurrent assets Stockholders' Equity Total stockholders' equity Total stockholders equity 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 12%, 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 4%, is the company more or less efficient at converting sales to profit than other companies in the same industry? The profit margin is: The company is more efficient at converting sales to profit (True or False) (c) Calculate the asset tumover ratio for the month of January of the industry average asset turnover is 0.4 times per month, is the company more or less efficient al producng revenues with its ussels than other companies in the same industry? The asset turnover ratio is: Times The company is more efficient at producing toonues with its assets (True or False)
