The Question is split into parts.
Determine Journal entries:
Determine Journal entries:
Determine the Adjusted Trial balance:
prepare mulit step income statement ending in January 31, 2021:
Prepare a balance sheet:
Closing journal entries:
Analyze for ACME fireworks:
On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Accounta Debit Credit Cash $ 25, 100 Accounts Receivable 46,200 Allowance for Uncollectible Accounts $ 4,200 Inventory 20,000 Land 46.000 Equipment 15,000 Accumulated Depreciation 1,500 Accounts Payable 28,500 Noton Payable (6#, due April 1, 2022) 50,000 Common Stock 35,000 Retained Earnings 33, 100 Totale $152,300 5152,300 During January 2021, the following transactions occur January 2 Sold gift cards totaling $8,000. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional Inventory on account. $147,000 January 15 Firework sales for the first halt of the month total $135,000. All of those sales are on account. The cost of the units old is 573,800 January 23 Receive $125,400 from customers on accounts receivable. January 25 Pay $90,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $4,800. January 30 Firework sales for the second half of the month total $243,000 Sales include $11,000 for cash and $132,000 on account. The cost of the units sold 15 $79,500. January 31 Pay cash for monthly malarlos, 552,000. 1 Record sale of gift cards totaling $8,000. The cards are redeemable for merchandise within one year of the purchase date. 2 Record purchase of additional inventory on account, $147,000. 3 Record fireworks sales for the first half of the month totaling $135,000. All of these sales are on account. 4 Record the cost of the units sold is $73,800. 5 Record receipt of $125,400 from customers on accounts receivable. 6 Record payment of $90,000 to inventory suppliers on 7 Record write-off of accounts receivable as uncollectible, $4,800. 8 Record fireworks sales for the second half of the month totaling $143,000. Sales include $11,000 for cash and $132,000 on account, 9 Record the cost of the units sold of $79,500. 10 Record payment of cash for monthly salaries, $52,000. 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 $3,000 and a two-year service life. Record the depreciation for the month of January. 2 The company estimates future uncollectible accounts. The company determines $11,000 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 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) Record bad debts at the end of January. 3 Accrued interest expense on notes payable for January. Accrued income taxes at the end of January are $13,000. 5 By the end of January, $3,000 of the gift cards sold on January 2 have been redeemed. 3. Prepare an adjusted trial balance as of January 31, 2021. ACME Fireworks Adjustad Trial Balance January 31, 2021 Accounts Debit Credit Totals 4. Prepare a multiple-step income statement for the period ended January 31, 2021. ACME FIREWORKS Income Statement For the year ended January 31, 2021 Total Operating Expenses ACME FIREWORKS Classified Balance Sheet January 31, 2021 Assets Llabilities Less: Allowance for Uncollectible Accounts Total Current Liabilities Total Current Assets Total Liabilities Stockholders Equity + . Total Stockholders' Equity Total Liabilties and Stockholders Equity Total Assets 1 Record the closing entry for revenue accounts. N 2 Record the closing entry for expense accounts. a-1. Calculate the current ratio at the end of January Current Ratio Choose Denominator - Choose Numerator Current Ratio Current Ratio a-2. If the average current ratio for the industry is 1.8, Is ACME Fireworks more or less liquid than the industry average? More liquid O Less liquid Requirement 2: b-1. Calculate the acld-test ratlo at the end of January Acid-tost Ratio + Choose Denominator - Acld-test Ratio Choose Numerator Acid-test Ratio -2. If the average acid-test ratio for the industry is 1.5, 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: 01. Assume the notes payable were due on April 1, 2021, rather than April 1, 2022. Calculate the revised current ratio ot the end of January Current Ratio Choose Numerator Choose Denominator Current Ratio Current Ratio mes c-2. Indicate whether the revised ratio would increase, decrease, or remain unchanged. O Decrease the current ratio O Increase the current ratio O Remain unchanged
