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 $ 26,400 48,800 $ 5,500 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 21,300 59,000 21,500 2,800 29,800 63,000 48,000 27,900 $177,000 $177,000 During January 2021, the following transactions occur: January 2 Sold gift cards totaling $10,600. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $160,000. January 15 Firework sales for the first half of the month total $148,000. All of these sales are on account. The cost of the units sold is $80,300. January 23 Receive $126,700 from customers on accounts receivable. January 25 Pay $103,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,100. January 30 Firework sales for the second half of the month total $156,000. Sales include $15,000 for cash and $141,000 on account. The cost of the units sold is $86,000. January 31 Pay cash for monthly salaries, $53,300. 7. Analyze the following for ACME Fireworks Requirement 1: a-1. Calculate the current ratio at the end of January. Current Ratio Choose Numerator Choose Denominator = Current Ratio . II Current Ratio : II 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 O Less liquid Requirement 2: b-1. Calculate the acid-test ratio at the end of January. Acid-test Ratio Choose Numerator Choose Denominator Acid-test Ratio = Acid-test Ratio : = 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 O Less likely Requirement 3: C-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 Choose Denominator = Current Ratio = Current Ratio + + II = times c-2. Indicate whether the revised ratio would increase, decrease, or remain unchanged. Decrease the current ratio O Increase the current ratio Remain unchanged 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 $ 26,400 48,800 $ 5,500 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 21,300 59,000 21,500 2,800 29,800 63,000 48,000 27,900 $177,000 $177,000 During January 2021, the following transactions occur: January 2 Sold gift cards totaling $10,600. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $160,000. January 15 Firework sales for the first half of the month total $148,000. All of these sales are on account. The cost of the units sold is $80,300. January 23 Receive $126,700 from customers on accounts receivable. January 25 Pay $103,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,100. January 30 Firework sales for the second half of the month total $156,000. Sales include $15,000 for cash and $141,000 on account. The cost of the units sold is $86,000. January 31 Pay cash for monthly salaries, $53,300. 7. Analyze the following for ACME Fireworks Requirement 1: a-1. Calculate the current ratio at the end of January. Current Ratio Choose Numerator Choose Denominator = Current Ratio . II Current Ratio : II 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 O Less liquid Requirement 2: b-1. Calculate the acid-test ratio at the end of January. Acid-test Ratio Choose Numerator Choose Denominator Acid-test Ratio = Acid-test Ratio : = 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 O Less likely Requirement 3: C-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 Choose Denominator = Current Ratio = Current Ratio + + II = times c-2. Indicate whether the revised ratio would increase, decrease, or remain unchanged. Decrease the current ratio O Increase the current ratio Remain unchanged