The following information applies to the questions displayed below. On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2019) Common Stock Retained Earnings Debit Credit $26,200 48,400 $5,300 21,100 57,000 20,500 2,600 29,600 61,000 46,000 28,700 Totals $173,200 $173,200 During January 2018, the following transactions occur: January 2. Sold gift cards totaling $10,200. The cards are redeemable for merchandise within one year of the purchase date January 6. Purchase additional inventory on account, $158,000 January 15. Firework sales for the first half of the month total $146,000. All of these sales are on account. The cost of the units sold is $79,300. January 23. Receive $126,500 from customers on accounts receivable January 25. Pay $101,000 to inventory suppliers on accounts payable January 28. Write off accounts receivable as uncollectible, $5,900 January 30. Firework sales for the second half of the month total $154,000. Sales include $17,000 for cash and $137,000 on account. The cost of the units sold is $85,000 January 31. Pay cash for monthly salaries, $53,100. value: Required Informatlon 0.00 points 1. Record each of the transactions listed above. (If no entry is required for a transaction/event, select "No journal entry required in the first account field) View transaction list Journal entry worksheet 10 Sold gift cards totaling $10,200. The cards are redeemable for merchandise within one year of the purchase date. Note: Enter debits before credits Date General Journal Debit Credit January 02 Record entry Clear entry View general journal value: Required information 10.00 points 1. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a residual value of $4,300 and a two-year service life 2. The company estimates future uncollectible accounts. The company determines $22,000 of accounts receivable on January 31 are past due, and 30% 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.) 3. Accrued interest expense on notes payable for January 4. Accrued income taxes at the end of January are $14,100 5. By the end of January, $4,100 of the gift cards sold on January 2 have been redeemed 2. Record the adjusting entries on January 31 for the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 4 Record the depreciation for the month of January Note: Enter debits before credits Date General Journal Debit Credit January 31 7 value 10.00 points 3. Prepare an adjusted trial balance as of January 31, 2018. ACME Fireworks Adjusted Trial Balance January 31, 2018 Accounts Debit Credit Totals 8.10.00 points value: 4. Prepare a multiple-step income statement for the period ended January 31, 2018 ACME FIREWORKS Income Statement For the year ended January 31, 2018 Total operating expenses 9.10.00 points value: 5. Prepare a classified balance sheet as of January 31, 2018. (Enter the Asset Accounts in order of liquidity. Amounts to be deducted should be indicated with a minus sign.) ACME FIREWORKS Balance Sheet January 31, 2018 Assets Liabilities Less: Allowance for uncollectible accounts Total current assets Total current liabilities Total liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity Total assets 10. 1000 points value: 6. Record closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 Record the closing entry for revenue accounts. Note: Enter debits before credits. Date General Journal Debit Credit January 31, 2018 Record entry Clear entry View general journal value: 10.00 points 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 Current Ratio 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 NumeratorChoose 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)? more likely less likely Requirement 3 c-1. Assume the notes payable were due on April 1, 2018, rather than April 1, 2019. Calculate the revised current ratio at the end of January. Current Ratio Choose Numerator Choose DenominatorCurrent Ratio Current Ratio times c-2. Indicate whether the revised ratio would increase, decrease, or remain unchanged. Decrease the current ratio Increase the current ratio Remain unchanged