On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Cash Debit Credit $25,900 Accounts Receivable 46,500 Allowance for Uncollectible Accounts $4,300 Inventory 50,000 Land 91,600 Accounts Payable 25,200 Notes Payable (9%, due in 3 years) 50,000 Common Stock 76,000 Retained Earnings 58,500 Totals $214,000 $214,000 The $50,000 beginning balance of inventory consists of 500 units, each costing $100. During January 2024, Big Blast Fireworks had the following inventory transactions: January 3 Purchase 1,850 units for $209,050 on account ($113 each). January 8 Purchase 1,950 units for $230,100 on account ($118 each). January 12 Purchase 2,050 units for $252,150 on account ($123 each). January 15 Return 200 of the units purchased on January 12 because of defects. January 19 Sell 6,000 units on account for $900,000 The cost of the units sold is determined using a FIFO perpetual inventory system. January 22 Receive $881,000 from customers on accounts receivable. January 24 Pay $650,000 to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $2,900. January 31 Pay cash for salaries during January, $139,000. The following information is available on January 31, 2024. a. At the end of January, the company estimates that the remaining units of inventory purchased on January 12 are expected to sell in February for only $100 each. [Hint: Determine the number of units remaining from January 12 after subtracting the units returned on January 15 and the units assumed sold (FIFO) on January 19.] b. The company records an adjusting entry for $3,830. for estimated future uncollectible accounts. c. The company accrues interest on notes payable for January. Interest is expected to be paid each December 31. d. The company accrues income taxes at the end of January of $14,300. Unadjusted Sales Revenue Cost of Goods Sold Gross Profit BIG BLAST FIREWORKS Multiple-Step Income Statement For the Year Ended January 31, 2024 Salaries Expense Bad Debt Expense Total Operating Expenses Operating Income Interest Expense Income Before Taxes Income Tax Expense Net Income 900,000 698,250 $ 201,750 139,000 0 139,000 62,750 0 62,750 0 $ 62,750 Unadjusted Current Assets: Assets Total Current Assets Long-term Assets: Total Assets BIG BLAST FIREWORKS Classified Balance Sheet January 31, 2024 Liabilities Current Liabilities: $ 0 0 0 0 EA Total Current Liabilities 0 0 Total Liabilities 0 Stockholders' Equity 0 0 Total Stockholders' Equity 0 0 Total Liabilities & Stockholders' Equity $ 0 Analyze how well Big Blast Fireworks manages its inventory. (Enter your inventory turnover ratio and gross profit ratio values to one decimal plac Analyze how well Big Blast Fireworks' manages its inventory: (a) Calculate the inventory turnover ratio for the month of January. If the industry average of the inventory turnover ratio for the month of January is 18 times, is the company managing its inventory more or less efficiently than other companies in the same industry? The inventory turnover ratio is: Is the company managing its inventory more or less efficiently than other companies in the same industry? times (b) Calculate the gross profit ratio for the month of January. If the industry average gross profit ratio is 28%, is the company more or less profitable per dollar of sales than other companies in the same industry? The gross profit ratio is: Is the company more or less profitable per dollar of sales than other companies in the same industry? % (c) Used together, what might the inventory turnover ratio and gross profit ratio suggest about Big Blast Fireworks' business strategy? Is the company's strategy to sell a higher volume of less expensive items or does the company appear to be selling a lower volume of more expensive items? Based on the inventory turnover ratio and the gross profit ratio, Big Blast Fireworks' business strategy appears to be selling a Balance Sheet Analysis