On January 1, 2024, the general ledger of Dynamite Fireworks includes the following account balances: Accounts Debit Credit Cash $23,900 Accounts Receivable 13,600 Allowance for Uncollectible Accounts $1,400 Supplies 2,500 Notes Receivable (6%, due in 2 years) 20,000 Land 77,000 Accounts Payable 7,200 Common stock 96,000 Retained Earnings Totals 32,400 $137.000 $137.000 Provide services to customers for cash, $35,100. Provide services to customers on account, $72,400. Write off accounts receivable as uncollectible, $1,000. (Assume the company uses the allowance method) During January 2024, the following transactions occur: January 2 January 6 January 15 January 20 January 22 January 25 Pay cash on accounts payable, $5,500. January 30 Required: Pay cash for salaries, $31,400 Receive cash on accounts receivable, $70,000. Pay cash for utilities during January, $13,700. 1. Record each of the transactions listed above. 2. Record adjusting entries on January 31. a. The company estimates future uncollectible accounts. The company determines $5,000 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger to split total accounts receivable into the $5,000 past due and the remaining amount not past due.) b. Supplies at the end of January total $700. All other supplies have been used. c. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31. d. Unpaid salaries at the end of January are $33,500. 3. Prepare an adjusted trial balance as of January 31, 2024, after updating beginning balances (above) for transactions during January (Requirement 1) and adjusting entries at the end of January (Requirement 2) [Note: a worksheet is provided and the trial balance there counts for this] 4. Prepare an income statement for the period ended January 31, 2024. 5. Prepare a classified balance sheet as of January 31, 2024. 6. Record the closing entries. 7. Prepare a post-closing trial balance 8. Analyze how well 3D Family Fireworks manages its receivables: a. Calculate the receivables turnover ratio for the month of January. (Hint: For the numerator, use total services provided to customers on account.) If the industry average of the receivables turnover ratios for the month of January is 4.2 times, is the company collecting cash from customers more or less efficiently than other companies in the same industry? b. Calculate the ratio of Allowance for Uncollectible Accounts to Accounts Receivable at the end of January. Based on a comparison of this ratio to the same ratio at the beginning of January, does the company expect an improvement or worsening in cash collections from customers on credit sales? 1 2 DATE 3 1 4 2 5 3 6 4 7 5 86 97 08 19 20 3 1 4 2 5 3 6 4 75 8 6 97 08 19 20 31 42 53 64 75 86 97 08 19 #20 13 1 GENERAL JOURNALI POST. DESCRIPTION REF DEBIT Page: 19 General Journal Adjusting General Journal Closing General Journal Ready CREDIT 1 2 DATE 3 1 4 2 5 3 6 4 7 5 8 6 9 7 10 8 11 9 12 10 13 11 14 12 15 13 16 14 17 15 18 16 19 17 20 18 21 19 2 20 23 21 4 22 5 23 6 24 7 25 8 26 9 27 0 28 1 29 2 30 3 31 GENERAL JOURNAL DESCRIPTION POST REF. DEBIT Pages 20 CREDIT ACCOUNT: Cash S DATE 2024 7 Jan 1 Balance ACCOUNT NO 101 POST BALANCE ITEM REF DEBIT CREDIT DEBIT CREDIT 23,900.00 8 9 10 11 12 13 15 ACCOUNT: Accounts Receivable ACCOUNT NO: 111 17 POST BALANCE 18 DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT 19 2024 20 Jan 1 Balance V 13,600.00 21 22 23 24 26 ACCOUNT: Allowance for Uncollectible accounts ACCOUNT NO: 115 28 POST BALANCE 29 DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT 30 2024 31 Jan 1 Balance 32 33 1,400.00 1,400.00 1,400.00 34 36 ACCOUNT: Supplies 38 39 DATE ITEM POST REF. ACCOUNT NO: BALANCE 121 DEBIT CREDIT DEBIT CREDIT 40 2024 41 Jan Balance N 2,500.00 42 43 44 46 ACCOUNT: Notes Receivable. Ready General Journal ACCOUNT NO: 131 Adjusting General Journal Closing General Journal General Ledger template AutoSave OFF Exercise 5- Home Insert Draw Page Layout Formulas Data Review View Tell me Calibri (Body) 11 AA Wrap Text Paste BIU General Merge & Center $ 8164 A D 46 ACCOUNT Notes Receivable 48 49 DATE 50 2024 51 Jan 1 Balance 1 ACCOUNT NO 131 POST BALANCE ITEM REF. DEBIT CREDIT DEBIT CREDIT v 20,000.00 52 53 55 ACCOUNT Interest Receivable 57 58 DATE POST ACCOUNT NO BALANCE 135 ITEM REF DEBIT CREDIT DEBIT CREDIT 59 60 61 62 64 ACCOUNT Land 66 67 DATE 68 2024 69 Jan Balance ACCOUNT NO 141 ITEM POST REF BALANCE DEBIT CREDIT DEBIT CREDIT 77.000.00 70 72 ACCOUNT: Accounts Payable ACCOUNT NO: 201 74 POST BALANCE 75 DATE ITEM REF DEBIT CREDIT DEBIT CREDIT 76 2024 77 Jan I Balance 7,200.00 78 79 80 ITEM POST REF ACCOUNT NO BALANCE 221 DEBIT CREDIT DEBIT CREDIT 83 ACCOUNT Salaries Payable 85 86 DATE 87 88 89 91 ACCOUNT ACCOUNT NO 301 Common Stock General Journal Adjusting General Journal Closing General Journal Ready General Ledger template MacBo AutoSave Exercise 5-2 Home Insert Draw Page Layout Formulas Data Review View Tell me Calibri (Body) 11 AA == Wrap Text General Paste BIU A Merge & Center $% B164 x A B C D E 138 140 ACCOUNT Salaries Expense 142 POST ACCOUNT NO BALANCE 521 143 DATE ITEM REF DEBIT CREDIT DEBIT CREDIT 144 ACCOUNT NO: 531 POST BALANCE ITEM REF. DEBIT CREDIT DEBIT CREDIT 145 146 147 148 150 ACCOUNT Utilities Expense 152 153 DATE 154 155 156 157 158 160 ACCOUNT Bad Debt Expense 162 163 DATE 164 165 166 167 168 70 171 72 173 74 175 176 77 78 79 80 181 82 ACCOUNT NO 541 POST BALANCE ITEM REF DEBIT CREDIT DEBIT CREDIT J General Journal Adjusting General Journal Closing General Journal General Ledger template Ready Calibri (Body) 11 - AA === Wrap Text General Paste BIU Merge & Center $ % 9 Conditional Format Formatting as Table Styles Call Insert Delen Format N22 Sx ACCOUNT NAME 1 Cash 2 Accounts Receivable Allowance for Uncollectible Accounts 10 4pplies 11 SNotes Receivable 12 6nterest Receivable 13 Pand Accounts Payable 15 Salaries Payable 16 10 Common Stock 17 11ned Eaming 18 12 Service Revenue 19 13nterest income 20 14 Supplies Experie 21 15 Salaries Expense 22 16 Utilities Experie 23 17 Bad Debt Expense 24 18 25 19 2620 27 21 2823 29 23 30 24 31 25 C D Dynamite Fireworks: Worksheet For the month andad january 31, 2024) TRIAL BALANCE DORIT CREDIT H ADJUSTMENTS ADIUSTED TRIAL BALANCE INCOME STATEMENT BALANCE SHEET DENT CREDIT DEBIT CREDIT DEBIT CREDIT DENT CREDIT General Journal Adjusting General Joumal Closing General Journal General Ledger template Worksheet (adj) trial bal Income Statement Stmt of Stockholders Ready MacBook Air Home Insert Draw Calibri (Body) 11 v A A Paste BIU A J29 1 2 3 4 5 Revenue 6 Service Revenue 7 Interest Income 8 Total Revenue 9 10 Expenses 11 Supplies Expense 12 Salaries Expense fx Dynamite Fireworks Income Statement For the month ended January 31, 2024 13 Utilities Expense 14 Bad Debt Expense 15 Net Income (Loss) Total Expenses $ 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 C D E 1 2 3 4 Paste L27 LB BIU fx A C D Dynamite Fireworks Statement of Stockholders' Equity For the month ended January 31, 2024 Common Stock Retained Earnings Total Stockholders' Equity 5 6 Beginning balance January 1, 2024 7 Issuance of common stock 8 Add: Net income (or Less: Net loss) 9 Less: Dividends 10 Ending balance January 31, 2024 $ $ $ 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Merge & Center $ -% G H