On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Credit Debit $ 60, 700 29,000 $ 4,200 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Notes Receivable (5%, due in 2 years) Land Accounts Payable Common Stock Retained Earnings Totals 38,300 36,000 175,000 16,800 240,000 78,000 $ 339,000 $ 339,000 During January 2021, the following transactions occur: January 1 Purchase equipment for $21,500. The company estimates a residual value of $3,500 and a five-year service life. January 4 Pay cash on accounts payable, $11,500. January 8 Purchase additional inventory on account, $102,900. January 15 Receive cash on accounts receivable, $24,000. January 19 Pay cash for salaries, $31,800. January 28 Pay cash for January utilities, $18,500. January 30 Sales for January total $240,000. All of these sales are on account. The cost of the units sold is $125,000. 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 $5,000 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 2% 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 $34,600. e. Accrued income taxes at the end of January are $11,000. No Date General Journal Debit Credit 1 Jan 01 21,500 Equipment Accounts Payable x 21,500 2 Jan 04 Accounts Payable 11,500 olol Cash 11,500 3 Jan 08 102,900 Inventory Accounts Payable olol 102,900 4 Jan 15 Cash 24,000 Accounts Receivable 24,000 5 Jan 19 31,800 Salaries Expense Cash olol 31,800 6 Jan 28 Utilities Expense 18,500 Cash 18,500 7 Jan 30 Accounts Receivable 240,000 00 00 00 Sales Revenue 240,000 8 Jan 30 Cost of Goods Sold 125,000 Inventory 125,000 9 Jan 31 JO 300 Depreciation Expense Accumulated Depreciation 300 10 Jan 31 Bad Debt Expense Allowance for Uncollectible Accounts olol 3,100 3,100 11 Jan 31 Interest Receivable 150 olo Interest Revenue 150 12 Jan 31 34,600 Salaries Expense Salaries Payable 34,600 OOOO 13 Jan 31 11,000 Income Tax Expense Income Tax Payable 11,000 14 Jan 31 Cash x 15 Jan 31 Cash x Adjusted TNT FIREWORKS Multiple-Step Income Statement For the year ended January 31, 2021 Gross profit $ 0 Total operating expenses Operating income 0 0 $ 0 TNT FIREWORKS Balance Sheet January 31, 2021 Liabilities Current Liabilities: Assets Current Assets: Total Current Liabilities 0 Total Current Assets 0 Total Liabilities Noncurrent Assets: Stockholders' Equity 0 Total Stockholders' Equity Total Liabilities & Stockholders' Equity Total Assets $ 0 $ 0 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 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 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)