On January 1, 2024, the general ledger of ACME Fireworks includes the following account balances: During January 2024, the following transactions occur: January 6 Purchase additional inventory on account, $163,000. ACME uses the perpetual inventory system. sold is $81,800. January 23 Receive $127,000 from customers on accounts receivable. January 25 Pay $106,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,400. The cost of the units sold is $87,500. January 31 Pay cash for monthly salaries, $53,600. The following information is available on January 31. a. 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 $5,000 and a two-year service life. b. The company records an adjusting entry for $16,140 for estimated future uncollectible accounts. c. The company has accrued interest on notes payable for January. d. The company has accrued income taxes at the end of January of $14,600. 1 Record sale of gift cards totaling $11,200. The cards are redeemable for merchandise within one year of the purchase date. 2 Record purchase of additional inventory on account, $163,000. 3 Record firework sales for the first half of the month totaling $151,000. All of these sales are on account. 4 Firework sales for the first half of the month total $151,000. The cost of the units sold is $81,800. Record the cost of the units sold. 5 Record receipt of $127,000 from customers on accounts receivable. 6 Record payment of $106,000 to inventory suppliers on accounts payable. 7 Record write-off of accounts receivable as uncollectible, $6,400. 8 Record firework sales for the second half of the month totaling $159,000. Sales include $13,000 for cash and $146,000 on account. 9 Firework sales for the second half of the month total $159,000. Sales include $13,000 for cash and $146,000 on account. The cost of the units sold is $87,500. Record the cost of the units sold. 10 Record payment of cash for monthly salaries, $53,600. 1 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 $5,000 and a two-year service life. Record the adjusting entry for depreciation. 2 The company records an adjusting entry for $16,140 for estimated future uncollectible accounts. 12 The company records an adjusting entry for $16,140 for estimated future uncollectible accounts. 13 The company has accrued interest on notes payable for January. 14 The company has accrued income taxes at the end of January of $14,600 15 By the end of January, $4,600 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold). 16 Record the entry to close the revenue accounts. 17 Record the entry to close the expense accounts. \begin{tabular}{|c|c|c|} \hline \multicolumn{2}{|c|}{ ACME Fireworks } \\ \hline & & \\ \hline & Income Statement & \\ \hline & & \\ \hline & & \\ \hline Gross Profit & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Ootal Operating Expenses & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{2}{|c|}{ ACME Fireworks } \\ \hline & & \\ \hline & Income Statement & \\ \hline & & \\ \hline & & \\ \hline Gross Profit & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Ootal Operating Expenses & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|} \hline \multicolumn{2}{|l|}{ Analyze the following for ACME Fireworks: } \\ \hline \begin{tabular}{l} (a) Calculate the current ratio at the end of January. If the average current ratio for the industry is 1.80 , is AC \\ less liquid than the industry average? \end{tabular} & Fireworks more or \\ \hline \multicolumn{2}{|l|}{ The current ratio is: } \\ \hline \multicolumn{2}{|l|}{ Is the company more or less liquid than the industry average? } \\ \hline \multicolumn{2}{|l|}{\begin{tabular}{l} (b) Calculate the acid-test ratio at the end of January. If the average acid-test ratio for the industry is \\ 1.50 , is ACME Fireworks more or less likely to have difficulty paying its currently maturing debts (compared to the industry \\ average)? \end{tabular}} \\ \hline \multicolumn{2}{|l|}{ The acid-test ratio is: } \\ \hline \multicolumn{2}{|l|}{ Is the company more or less likely to have difficulty paying its currently maturing debts? } \\ \hline \multicolumn{2}{|c|}{\begin{tabular}{l} (c) Assume the notes payable were due on April 1,2024 , rather than April 1,2025 . Calculate the revised current ratio at the end of \\ January, and indicate whether the revised ratio would increase, decrease, or remain unchanged compared to your answer in (a). \end{tabular}} \\ \hline The revised current ratio is & \\ \hline \begin{tabular}{l} ndicate whether the revised ratio would increase, decrease, or remain unchanged compared to your answer \\ n (a). \end{tabular} & \\ \hline \end{tabular} On January 1, 2024, the general ledger of ACME Fireworks includes the following account balances: During January 2024, the following transactions occur: January 6 Purchase additional inventory on account, $163,000. ACME uses the perpetual inventory system. sold is $81,800. January 23 Receive $127,000 from customers on accounts receivable. January 25 Pay $106,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,400. The cost of the units sold is $87,500. January 31 Pay cash for monthly salaries, $53,600. The following information is available on January 31. a. 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 $5,000 and a two-year service life. b. The company records an adjusting entry for $16,140 for estimated future uncollectible accounts. c. The company has accrued interest on notes payable for January. d. The company has accrued income taxes at the end of January of $14,600. 1 Record sale of gift cards totaling $11,200. The cards are redeemable for merchandise within one year of the purchase date. 2 Record purchase of additional inventory on account, $163,000. 3 Record firework sales for the first half of the month totaling $151,000. All of these sales are on account. 4 Firework sales for the first half of the month total $151,000. The cost of the units sold is $81,800. Record the cost of the units sold. 5 Record receipt of $127,000 from customers on accounts receivable. 6 Record payment of $106,000 to inventory suppliers on accounts payable. 7 Record write-off of accounts receivable as uncollectible, $6,400. 8 Record firework sales for the second half of the month totaling $159,000. Sales include $13,000 for cash and $146,000 on account. 9 Firework sales for the second half of the month total $159,000. Sales include $13,000 for cash and $146,000 on account. The cost of the units sold is $87,500. Record the cost of the units sold. 10 Record payment of cash for monthly salaries, $53,600. 1 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 $5,000 and a two-year service life. Record the adjusting entry for depreciation. 2 The company records an adjusting entry for $16,140 for estimated future uncollectible accounts. 12 The company records an adjusting entry for $16,140 for estimated future uncollectible accounts. 13 The company has accrued interest on notes payable for January. 14 The company has accrued income taxes at the end of January of $14,600 15 By the end of January, $4,600 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold). 16 Record the entry to close the revenue accounts. 17 Record the entry to close the expense accounts. \begin{tabular}{|c|c|c|} \hline \multicolumn{2}{|c|}{ ACME Fireworks } \\ \hline & & \\ \hline & Income Statement & \\ \hline & & \\ \hline & & \\ \hline Gross Profit & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Ootal Operating Expenses & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{2}{|c|}{ ACME Fireworks } \\ \hline & & \\ \hline & Income Statement & \\ \hline & & \\ \hline & & \\ \hline Gross Profit & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Ootal Operating Expenses & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|c|c|} \hline \multicolumn{2}{|l|}{ Analyze the following for ACME Fireworks: } \\ \hline \begin{tabular}{l} (a) Calculate the current ratio at the end of January. If the average current ratio for the industry is 1.80 , is AC \\ less liquid than the industry average? \end{tabular} & Fireworks more or \\ \hline \multicolumn{2}{|l|}{ The current ratio is: } \\ \hline \multicolumn{2}{|l|}{ Is the company more or less liquid than the industry average? } \\ \hline \multicolumn{2}{|l|}{\begin{tabular}{l} (b) Calculate the acid-test ratio at the end of January. If the average acid-test ratio for the industry is \\ 1.50 , is ACME Fireworks more or less likely to have difficulty paying its currently maturing debts (compared to the industry \\ average)? \end{tabular}} \\ \hline \multicolumn{2}{|l|}{ The acid-test ratio is: } \\ \hline \multicolumn{2}{|l|}{ Is the company more or less likely to have difficulty paying its currently maturing debts? } \\ \hline \multicolumn{2}{|c|}{\begin{tabular}{l} (c) Assume the notes payable were due on April 1,2024 , rather than April 1,2025 . Calculate the revised current ratio at the end of \\ January, and indicate whether the revised ratio would increase, decrease, or remain unchanged compared to your answer in (a). \end{tabular}} \\ \hline The revised current ratio is & \\ \hline \begin{tabular}{l} ndicate whether the revised ratio would increase, decrease, or remain unchanged compared to your answer \\ n (a). \end{tabular} & \\ \hline \end{tabular}