Required information The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Credit Debit $ 26,700 49,480 $ 5,800 21,600 62,000 23,000 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2022) Common Stock Retained Earnings Totals 3, tee 30,100 66,00 51,000 26,700 $182,700 $182,700 During January 2021, the following transactions occur January 2 Sold gift cards totaling $11,200. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $163,000. January 15 Firework sales for the first half of the month total $151,000. All of these sales are on account. The cost of the units sold is $81,800. January 23 Receive $127,000 from customers on accounts receivable. January 25 Pay $106,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,400. January 30 Firework sales for the second half of the month total $159,000. Sales include $13,000 for cash and $146,000 on account. The cost of the units sold is $87,500. January 31 Pay cash for monthly salaries, $53,600. alyze the following for ACME Fireworks drement 1: alculate the current ratio at the end of January, 7. Analyze the following for ACME Fireworks Requirement 1: a-1. Calculate the current ratio at the end of January Current Ratio + Choose Denominator = + Current Liabilities Choose Numerator Current Assets Current Ratio Current Ratio 1111 + 0 a-2. If the average current ratio for the industry is 1.80, is ACME Fireworks more or less liquid than the industry average? More liquid Less liquid Requirement 2: b-1. Calculate the acid-test ratio at the end of January a-2. If the average current ratio for the industry is 1.80, is ACME Fireworks more or less liquid than the industry average? More liquid Less liquid Requirement 2: b-1. Calculate the acid-test ratio at the end of January Acid-test Ratio Choose Numerator + Choose Denominator = Quick Assets Acid-test Ratio Acid-test Ratio + Current Liabilities 0 b-2. If the average acid-test ratio for the industry is 1.50, is ACME Fireworks more or less likely to have difficulty paying its currently maturing debts (compared to the industry average)? O More likely lece likely 17 -2. If the average acid-test ratio for the industry is 1.50, is ACME Fireworks more or less kely to have difficulty paying its currently maturing debts (compared to the industry verage)? More likely Less likely tequirement 3: - 1. Assume the notes payable were due on April 1, 2021, rather than April 1.2022 Calculate the revised current ratio at the end of January. Current Ratio Choose Numerator Current Assets Choose Denominator - Current Liabilities Current Ratio Current Ratio 0 times = -2. Indicate whether the revised ratio would increase, decrease, or remain unchanged. Decrease the current ratio Increase the current ratio Remain unchanged S
