Requirement 1: a-1. Calculate the current ratio at the end of January. Current Ratio Choose Numerator Choose Denominator = Current Ratio Current Assets - Current Liabilities Current Ratio $ 413,500 - = 0 16 Part 6 of 7 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 5 points Debit $ 26,600 49,200 $ 5,700 Skipped 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 21,500 61,000 22,500 eBook 3,000 30,000 65, eee 50,000 27,100 $189,800 $180, 800 Print During January 2021, the following transactions occur: References January 2 Sold gift cards totaling $11,000. The cards are redeemable for merchandise within one year of the purchase date January 6 Purchase additional inventory on account, $162,000. January 15 Firework sales for the first half of the month total $150,000. All of these sales are on account. The cost of the units sold is $81,300. January 23 Receive $126,900 from customers on accounts receivable. January 25 Pay $105,6e8 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,300. January 30 Firework sales for the second half of the month total $158,000. Sales include $14,000 for cash and $144,000 on account. The cost of the units sold is $87,000. January 31 Pay cash for monthly salaries, $53,500. 6. Record closing entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) a-2. If the average current ratio for the industry is 1.80, is ACME Fireworks more or less liquid than the industry average? O 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 11 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 times View transaction list Journal entry worksheet Record the closing entry for revenue accounts. Note: Enter debits before credits. Date General Journal Debit Credit January 31, 2021 Record entry Clear entry View general journal
