On January 1, 2024, the general ledger of Parts Unlimited included the following account balances: Accounts Title Cash Accounts Receivable Inventory Land Equipment Debit Credit $ 162,400 12,400 37,800 340,000 347,500 $ 172,000 14,800 Accumulated depreciation Accounts Payable Common stock Retained Earnings Totals 520,000 193,300 $ 900,100 $ 900,100 From January 1 to December 31, the following summary transactions occurred: a. Purchased inventory on account, $325,800. b. Sold inventory on account, $567,200. The inventory cost $342,600. c. Received cash from customers on account, $558,700. d. Paid cash on account, $328,500. e. Paid cash for salaries, $94,700, and for utilities, $52,700. In addition, Parts Unlimited had the following transactions during the year: April 1 Purchased equipment for $95,000 using a note payable, due in 12 months plus 8% interest. The company also paid cash of $3,200 for freight and $3,800 for installation and testing of the equipment. The equipment has an estimated residual value of $10,000 and a 10-year service life. June 30 Purchased a patent for $40,000 from a third-party marketing company related to the packaging of the company's products. The patent has a 20-year useful life, after which it is expected to have no value. October 1 Sold equipment for $30,200. The equipment cost $60,700 and had accumulated depreciation of $37,400 at the beginning of the year. Additional depreciation for 2024 up to the point of the sale is $8,500. (Hint: Total accumulated depreciation equals the amount at the beginning of the year plus the amount recorded for the current year.) November 15 Several older pieces of equipment were improved by replacing major components at a cost of $54,100. These improvements are expected to enhance the equipment's operating capabilities. [Record this transaction using Alternative 2-capitalization of new cost.] Year-end adjusting entries: a. Depreciation on the equipment purchased on April 1, 2024, calculated using the straight-line method. b. Depreciation on the remaining equipment, $21,500. c. Amortization of the patent purchased on June 30, 2024, using the straight-line method. d. Accrued interest payable on the note payable. e. Equipment with an original cost of $65,400 had the following related information at the end of the year: accumulated depreciation of $40,300, expected cash flows of $15,700, and a fair value of $10,800. f. Accrued income taxes at the end of the year are $12,600. > Answer is not complete. Complete this question by entering your answers in the tabs below. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Using the information from the requirements above, complete the 'Analysis'. Note: Round "fixed asset turnover ratio" answer to 2 decimal places. Analyze how well Parts Unlimited manages its assets: (a) Calculate the fixed asset turnover ratio for the year, using the total amount of property, plant, and equipment (net of accumulated deprecation). If the industry average fixed asset turnover is 0.75, is the company more or less efficient at generating sales with its fixed assets than other companies in the same industry? (Hint: For the amount of fixed assets, use the net amount of all tangible long-term assets.) The fixed asset turnover ratio is: The company is more efficient at generating sales with its fixed assets. True (b) Suppose the equipment purchased on April 1, 2024, had been depreciated using the units of production method. At the time of purchase, expected output was 20,000 units, and actual production for 2024 was 2,000 units. Calculate the amount of depreciation expense that would have been recorded and determine the difference in net income and total assets for 2024 (ignoring tax effects). Units-of-production depreciation: Depreciation expense under units-of-production method is higher. (True or False) Income and total assets in 2024 would have been $ True lower by 9,200 (c) The transaction on June 30, 2024, shows the company purchased a patent for $40,000 from a third-party marketing company. Suppose the company instead spent $40,000 to internally develop the new packaging technology, which it then patented. Calculate the difference in net income and total assets for 2024 (ignoring tax effects). Additional expense for 2024 The income and total assets in 2024 would have been higher. (True or False) False