Mc Graw Hill Required information [The following information applies to the questions displayed below.] On January 1, 20

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Mc Graw Hill 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 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 Debit $ 26,800 49,600 21,700 63,000 23,500 $184,600 7. Analyze the following for ACME Fireworks Requirement 1: a-1. Calculate the current ratio at the end of January $ 5,900 3,200 30, 200 67,000 52,000 26,300 $184,600 During January 2021, the following transactions occur. January 2 Sold gift cards totaling $11,400. The cards are redeemable for merchandise within one year of the purchase. date. January 6 Purchase additional inventory on account, $164,000. January 15 Firework sales for the first half of the month total $152,000. All of these sales are on account. The cost of the units sold is $82,300. January 23 Receive $127,100 from customers on accounts receivable. January 25 Pay $107,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,500. January 30 Firework sales for the second half of the month total $160,000. Sales include $11,000 for cash and $149,000 on account. The cost of the units sold is $88,000. January 31 Pay cash for monthly salaries, $53,700. < Prev 8 7 of 7 F Next
a-1. Calculate the current ratio at the end of January. Choose Numerator Current Assets 225,400 More liquid O Less liquid Choose Numerator Answer is complete but not entirely correct. Current Ratio Quick Assets Choose Denominator Current Liabilities a-2. If the average current ratio for the industry is 1.80, is ACME Fireworks more or less liquid than the industry average? Requirement 2: b-1. Calculate the acid-test ratio at the end of January. e- 211,800 + 93,800 Current Ratio Current Ratio Answer is complete but not entirely correct. Acid-test Ratio Choose Denominator Current Liabilities 93,800 Acid-test Ratio Acid-test Ratio 2.40 2.26
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 O 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 Choose Numerator Current Assots 225,400 Answer is complete but not entirely correct. Current Ratio Choose Denominator Current Liabilities 144,800 Q. Current Ratio Current Ratio 1.56 times
c-2. Indicate whether the revised ratio would increase, decrease, or remain unchanged. Decrease the current ratio Increase the current ratio Remain unchanged