-1. Calculate the current ratio at the end of January.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 6MC: Prior to adjustments, Barrett Companys account balances at December 31, 2019, for Accounts...
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On January 1, 2021, the general ledger of ACME Fireworks Includes the following account balances:
Debit
Credit
Accounts
Cash
$ 25,000
Accounts Receivable
47,600
Allowance for Uncollectible Accounts
$ 4,900
Inventory
Land
20,700
53,000
Equipment
18,500
Accumulated Depreciation
2,200
Accounts Payable
29,200
Notes Payable (6%, due April 1, 2022)
57,000
Common Stock
42,000
Retained Earnings
30,300
Totals
$165,600 $165,600
During January 2021, the following transactions occur
January 2 Sold gift cards totaling $9,400. The cards are redeemable for merchandise within one year of the purchase
date.
January 6 Purchase additional inventory on account, $154,000.
January 15 Firework sales for the first half of the month total $142,000. All of these sales are on account. The cost
of the units sold is $77,300.
January 23 Receive $126,100 from customers on accounts receivable.
January 25 Pay $97,000 to inventory suppliers on accounts payable.
January 28 Write off accounts receivable as uncollectible, $5,500.
January 30 firework sales for the second half of the month total $150,000. Sales include $15,000 for cash and $135,000
on account. The cost of the units sold is $83,000.
January 31 Pay cash for monthly salaries, $52,700.
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
11
IE
#1
Current Ratio
Current Ratio](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7709141c-50cd-420f-850c-9a05f9f31f1a%2Fa682ab83-4d85-4ac2-8c85-3d220587d491%2F4g4du1j_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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:
Debit
Credit
Accounts
Cash
$ 25,000
Accounts Receivable
47,600
Allowance for Uncollectible Accounts
$ 4,900
Inventory
Land
20,700
53,000
Equipment
18,500
Accumulated Depreciation
2,200
Accounts Payable
29,200
Notes Payable (6%, due April 1, 2022)
57,000
Common Stock
42,000
Retained Earnings
30,300
Totals
$165,600 $165,600
During January 2021, the following transactions occur
January 2 Sold gift cards totaling $9,400. The cards are redeemable for merchandise within one year of the purchase
date.
January 6 Purchase additional inventory on account, $154,000.
January 15 Firework sales for the first half of the month total $142,000. All of these sales are on account. The cost
of the units sold is $77,300.
January 23 Receive $126,100 from customers on accounts receivable.
January 25 Pay $97,000 to inventory suppliers on accounts payable.
January 28 Write off accounts receivable as uncollectible, $5,500.
January 30 firework sales for the second half of the month total $150,000. Sales include $15,000 for cash and $135,000
on account. The cost of the units sold is $83,000.
January 31 Pay cash for monthly salaries, $52,700.
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
11
IE
#1
Current Ratio
Current Ratio
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