On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances: The $42,000 beginning balance of inventory consists of 420 units, each costing $100. During January 2024, Big Blast Fireworks had the following inventory transactions: January 3 purebase. 1,050 undts for 5115,500 on aecount {5110 each. Janabry is furohase 3,150 unita for 5132,250 on acdeunt {3115 each). January 12 Purehase 1,250 unite for 5150,060 on acteint (5120 each). January 15 Peturn is of of the uniti purehaned on san ary 12 because of defoets. inventory syetesis danusry 22 heceive 5529,900 fron eustoeere on aecount recelvable. Jenuary 24 pay 5359,000 to inventugry appliera on aceount payable. January 27 Write of feceunes receivable as uneollectible, 52, 100 ; January 31 Ray cash for salarien during Jariusy, 5110,0002. The following information is avaliable 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 $5.070 for estimated future uncollectible accounts. c. The company accrues interest on notes payabie for January. Interest is expected to be paid eoch December 31. Journal entry worksheet \begin{tabular}{c|cccc} & 5 & 6 & 7 & 8 \end{tabular} Note: Enter debits before credits. balances will appear for each account, based on your selection. Unadjusted Analyze how well Big Blast Fireworks manages its inventory. (Enter your inventory turnover ratio and gross profit ratio values to one decimal place.) Analyze how well Big Blast Fireworks' manages its inventery: (a) Calculate the inventory fumover ratio for the month of January. If the industry average of the inventory furnover ratio for the month of January is 13 times, is the company managing its imventory more of less efficiently than other companios in the same industry? The inventory turnover ratio is is the compary manaping is inventory more or less efficiently than other companies in the same industry? (b) Calculate the gross profit ratio for the month of January. If the industry average gross proft ratio is 31%, is the company more or less profitable per dollar of sales than other companies in the same industry? The gross proft ratio is: Is the company more or less profhable 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 Firewerks' business strasegy? is the company's strategy to seil a higher volume of less expensive items or does the company appear to be seling a lower volume of more expensive items? On January 1, 2024, the general ledger of Big Blast Fireworks includes the following account balances: The $42,000 beginning balance of inventory consists of 420 units, each costing $100. During January 2024, Big Blast Fireworks had the following inventory transactions: January 3 purebase. 1,050 undts for 5115,500 on aecount {5110 each. Janabry is furohase 3,150 unita for 5132,250 on acdeunt {3115 each). January 12 Purehase 1,250 unite for 5150,060 on acteint (5120 each). January 15 Peturn is of of the uniti purehaned on san ary 12 because of defoets. inventory syetesis danusry 22 heceive 5529,900 fron eustoeere on aecount recelvable. Jenuary 24 pay 5359,000 to inventugry appliera on aceount payable. January 27 Write of feceunes receivable as uneollectible, 52, 100 ; January 31 Ray cash for salarien during Jariusy, 5110,0002. The following information is avaliable 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 $5.070 for estimated future uncollectible accounts. c. The company accrues interest on notes payabie for January. Interest is expected to be paid eoch December 31. Journal entry worksheet \begin{tabular}{c|cccc} & 5 & 6 & 7 & 8 \end{tabular} Note: Enter debits before credits. balances will appear for each account, based on your selection. Unadjusted Analyze how well Big Blast Fireworks manages its inventory. (Enter your inventory turnover ratio and gross profit ratio values to one decimal place.) Analyze how well Big Blast Fireworks' manages its inventery: (a) Calculate the inventory fumover ratio for the month of January. If the industry average of the inventory furnover ratio for the month of January is 13 times, is the company managing its imventory more of less efficiently than other companios in the same industry? The inventory turnover ratio is is the compary manaping is inventory more or less efficiently than other companies in the same industry? (b) Calculate the gross profit ratio for the month of January. If the industry average gross proft ratio is 31%, is the company more or less profitable per dollar of sales than other companies in the same industry? The gross proft ratio is: Is the company more or less profhable 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 Firewerks' business strasegy? is the company's strategy to seil a higher volume of less expensive items or does the company appear to be seling a lower volume of more expensive items
