Required information Exercise 7-21 Complete the accounting cycle using long-term asset transactions (L07-4, 7-7) [The following information applies to the questions displayed below) On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: Account Debit Credit $50, 100 Accounts Receivable 25,800 Allowance for Uncollectible Accounta $ 2,600 36,700 Notes Receivable (54, due in 2 years) 16,800 159.000 Accounts Payable 15,200 Retained Earnings 2,400 0227200 Cash Land Common Stock 224,000 55,600 Totale During January 2021, the following transactions occur January 1Purchase equipment for $10.900. The company estimates a residual value of $1,900 and a tive-year service life. January 4 Pay canh on accounts payable, 39,900. January 8 Purchase additional inventory on account, $86,900. January 15 Receive cash on accounts receivable, $22,400. January 19 Pay cash for salaries, $30,200. January 28 Pay cash for January utilities, $16,900. January 30 sales for January total $224,000. All of these sales are on account. The cost of the units sold is $117.000. Information for adjusting entries: a. line . b. The company estimates Future uncollectible accounts. The company determines $3,400 of accounts receivable of January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger) c. Accrued interest revenue on notes receivable for January d. Unpaid salaries at the end of January are $33,000. e. Accrued income taxes at the end of January are $9.400. Exercise 7-21 Part 7 7. Analyze how well TNT Fireworks manages its assets: Requirement 1: --1. Calculate the return on assets ratio for the month of January Choose Numerator Net Income 11,390 Answer is complete but not entirely correct. Return on Assets Ratio Choose Denominator Return on Assets Ratio Average Total Assets = Return on assets 360,200 3.2% .-2. If the average return on assets for the industry in January is 2%, is the company more or less profitable than other companies in the same industry? More profitable Less profitable Requirement 2: 5-1. Calculate the profit margin for the month of January Choose Numerator Net Income 11,390 Answer is complete but not entirely correct. Profit Margin Choone Denominator Profit Margin Net Sales Profit Margin 224,000 5.1% b-2. If the industry average profit margin is 4%, is the company more or less efficient at converting sales to profit than other companies In the same industry? More efficient Less efficient Requirement 3: c-1. Calculate the asset turnover ratio for the month of January Choose Numerator Net Sales $ 224,000 Answer is complete but not entirely correct. Asset Turnover Ratio Choose Denominator Asset Turnover Ratio Average Total Assets Asset Turnover 360 200 0.62 times c-2. If the industry average asset turnover is 0.6 times per month, is the company more or less efficient at producing revenuts with its assets than other companies in the same industry? More efficient Less efficient