On January 1, Year 1, the general ledger of a company includes the following account balances:

Accounts	Debit				Credit
Cash	$	25,800
Accounts Receivable		7,200
Supplies		5,100
Land		70,000
Accounts Payable					$	5,200
Common Stock						85,000
Retained Earnings						17,900
Totals	$	108,100			$	108,100

During Year 1, the following transactions occur:

January		2		Purchase rental space for one year in advance, $12,000 ($1,000/month).
January		9		Purchase additional supplies on account, $5,500.
January		13		Provide services to customers on account, $27,500.
January		17		Receive cash in advance from customers for services to be provided in the future, $5,700.
January		20		Pay cash for salaries, $13,500.
January		22		Receive cash on accounts receivable, $26,100.
January		29		Pay cash on accounts payable, $6,000.

7. Analyze the following features of a company financial condition: a. What is the amount of profit reported for the month of January?

b. Calculate the ratio of current assets to current liabilities at the end of January.

c. Based a company financial profit and ratio of current assets to current liabilities, indicate whether a company financial appears to be in good or bad financial condition.

• Good

• Bad