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 7. Analyze the following for ACME Fireworks Show Transcribed Text During January 2021, the following transactions occur; January 2 Sold gift cards totaling $9,200. The cards are redeemable for merchandise within one year of the purchase date. a-1. Calculate the current ratio at the end of January. Debit $ 25,700 47,400 6 Purchase additional account, $153,000. January 15 Firework sales for the first half of the month total $141,000. All these sales are on account. The cost Choose Numerator Current Assets of the units sold is $76,000. January 23 Receive $126,000 from customers on accounts receivable. January 25 Pay $96,000 to inventory suppliers on accounts payable. January 20 Write off accounts receivable as uncollectible, $5,400. January 30 Firework sales for the second half of the month total $149,000. Sales include $13,000 for cash and $136,000 on account. The cost of the units sold is $82,500. January 31 Pay cash for monthly salaries, $52,600. Current Ratio Choose Denominator - -Current Liabilities 20,600 $2,000 18,000 Ű Credit 2,100 29,100 56,000 41,000 30,700 $163,700 $163,700 $ 4,800 Current Ratio Current Ratio 0 a-2. If the average current ratio for the industry is 1.80, is ACME Fireworks more or less Tiquid than the industry average? More liquid O Less liquid
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 7. Analyze the following for ACME Fireworks Show Transcribed Text During January 2021, the following transactions occur; January 2 Sold gift cards totaling $9,200. The cards are redeemable for merchandise within one year of the purchase date. a-1. Calculate the current ratio at the end of January. Debit $ 25,700 47,400 6 Purchase additional account, $153,000. January 15 Firework sales for the first half of the month total $141,000. All these sales are on account. The cost Choose Numerator Current Assets of the units sold is $76,000. January 23 Receive $126,000 from customers on accounts receivable. January 25 Pay $96,000 to inventory suppliers on accounts payable. January 20 Write off accounts receivable as uncollectible, $5,400. January 30 Firework sales for the second half of the month total $149,000. Sales include $13,000 for cash and $136,000 on account. The cost of the units sold is $82,500. January 31 Pay cash for monthly salaries, $52,600. Current Ratio Choose Denominator - -Current Liabilities 20,600 $2,000 18,000 Ű Credit 2,100 29,100 56,000 41,000 30,700 $163,700 $163,700 $ 4,800 Current Ratio Current Ratio 0 a-2. If the average current ratio for the industry is 1.80, is ACME Fireworks more or less Tiquid than the industry average? More liquid O Less liquid
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 12E: Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120...
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Please Explain Proper Step by Step and Do Not Give Solution In Image Format And Fast Answering Please & Thank In Advance
Transcribed Image Text: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
7. Analyze the following for ACME Fireworks
Show Transcribed Text
a-1. Calculate the current ratio at the end of January
Choose Numerator
Current Assets
Debit
$ 25,700
47,400
During January 2021, the following transactions occur;
January 2 Sold gift cards totaling $9,200. The cards are redeemable for merchandise within one year of the purchase
date.
6 Purchase
additional
January 15 Firework sales for the first half of the month total $141,000. A11 daythese sales are on account. The cost
of the units sold is $76,000.
January 23 Receive $126,000 from customers on accounts receivable.
January 25 Pay $96,000 to inventory suppliers on accounts payable.
January 28 Write off accounts receivable as uncollectible, $5,400.
January 30 Firework sales for the second half of the month total $149,000. Sales include $13,000 for cash and $136,000
on account. The cost of the units sold is $82,500.
January 31 Pay cash for monthly salaries, $52,600.
Current Ratio
Choose Denominator -
Current Liabilities
More liquid
O Less liquid
20,600
52,000
18,000
$163,700
Current Ratio
Current Ratio
Credit
$ 4,800
0
2,100
29,100
56,000
41,000
30,700
$163,700
a-2. If the average current ratio for the industry is 1.80, is ACME Fireworks more or less Tiquid than the industry average?
Transcribed Image Text:b-1. Calculate the acid-test ratio at the end of January
Acid-test Ratio
Choose Numerator+ Choose Denominator
Quick Assets
- Current Liabilities
O More likely
Less likely
b-2. If the average acid-test ratio for the industry is 1.50, is ACME Fireworks more or les likely to have difficulty paying its currently
maturing debts (compared to the industry average)?
Show Transcribed Text
Choose Numerator
Current Assets
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 Denominator
-Current Liabilities
Acid-test Ratio
Acid-test Ratio
=
Decrease the current ratio
O Increase the current ratio
O Remain unchanged
0
Current Ratio
Current Ratio
0 times
c-2. Indicate whether the revised ratio would increase, decrease, or remain unchanged.
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