1) Create a Journal Entry Worksheet:

a) 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 $4,700 and a two-year service life. Prepare the adjusting entry for depreciation.

b) The company estimates future uncollectible accounts. The company determines $24,000 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.) Prepare the adjusting entry for uncollectible accounts.

c) Accrued interest expense on notes payable for January. Prepare the adjusting entry for interest.

d) Accrued income taxes at the end of January are $14,300. Prepare the adjusting entry for income tax.

e) By the end of January, $4,300 of the gift cards sold on January 2 have been redeemed. Prepare the adjusting entry for gift cards redeemed.

f) Prepare the closing entry for revenue.

g) Prepare the closing entry for expenses.

2) Prepare an Income Statement

3) Create a Balance Sheet

4) Analyze this

On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Debit Credit Accounts $ 26,400 48,800 Cash Accounts Receivable Allowance for Uncollectible Accounts 5,500 21,300 59,000 21,500 Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2022) Common Stock 2,800 29,800 63,000 48,000 27,900 Retained Earnings $177,000 Totals $177,000 During January 2021, the following transactions occur: 2 Sold gift cards totaling $10,600. The cards are redeemable for merchandise within one year of the purchase date 6 Purchase additional inventory on account, $160,000 January January January 15 Firework sales for the first half of the month total $148,000. All of these sales are on account. The cost of the units sold is $80,300 January 23 Receive $126,700 from customers on accounts receivable January 25 Pay $103, 000 to inventory suppliers on accounts payable January 28 Write off accounts receivable as uncollectible, $6,100 January 30 Firework sales for the second half of the month total $156,000. Sales include $15,000 for cash and $141,000 on account. The cost of the units sold is $86,000 January 31 Pay cash for monthly salaries, $53,300 The following information is available on January 31. a. 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 $4,700 and a two-year service life. b. The company estimates future uncollectible accounts. The company determines $24,000 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.) c. Accrued interest expense on notes payable for January. d. Accrued income taxes at the end of January are $14,300. e. By the end of January, $4,300 of the gift cards sold on January 2 have been redeemed (ignore cost of goods sold). General Journal General Income Trial Balance Balance Sheet Analysis Requirement Ledger Statement Prepare an income statement for the period ended January 31, 2021. Choose the appropriate accounts to complete the company's income statement. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection Adjusted ACME Fireworks Income Statement For the year ended January 31, 2021 Gross profit 0 Total operating expenses 0 Operating income 0 0 Adjusted ACME Fireworks Classified Balance Sheet January 31, 2021 Assets Liabilities Current Assets: Current Liabilities: S 0 0 Total Current Liabilities 0 0 0 Total Liabilities Total Current Assets 0 Sto No Equity C Total Stockholders' Equity 0 O Total Liabilities & Stockholders' Equity $ 0 Total Assets Analyze the following for ACME Fireworks: (a) Calculate the current ratio at the end of January. If the average current ratio for the industry is 1.8, is ACME Fireworks more or less liquid than the industry average? The current ratio is: Is the company more or less liquid than the industry average? (b) Calculate the acid-test ratio at the end of January. 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)? The acid-test ratio is: Is the company more or less likely to have difficulty paying its currently maturing debts? (c) 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, and indicate whether the revised ratio would increase, decrease, or remain unchanged compared to your answer in (a). The revised current ratio is Indicate whether the revised ratio would increase, decrease, or remain unchanged compared to your answer in (a)