Exercise $7-21($Algo$)$ Complete the accounting cycle using long$-$term asset transactions $($LO$7-4,7-7)($GL$)$

On January $1,2024,$ the general ledger of TNT Fireworks includes the following account balances:

During January $2024,$ the following transactions occur:

January $1$ Purchase equipment for $$21,100.$ The company estimates a residual value of $$3,100$ and a five$-$year service

January $4$

January A Pay cash on accounts payable, $$11,100.$

January $8$ Purchase additional inventory on account, $$98,900.$

January $15$ Receive cash on accounts receivable, $$23,600.$

January $19$ Pay cash for salaries, $$31,400.$

January $28$ Pay cash for January utilities, $$18,100.$

January $30$ Firework sales for January total $$236,000.$ All of these sales are on account. The cost of the units sold is

$$123,000.$

The following information is available on January $31,2024.$

a$.$ Depreciation on the equipment for the month of January is calculated using the straight$-$line method.

b$.$ The company records an adjusting entry for $$5,580$ for estimated future uncollectible accounts.

c$.$ The company has accrued interest on notes receivable for January.

d$.$ Unpaid salaries owed to employees at the end of January are $$34,200.$

e$.$ The company accrued income taxes at the end of January $$10,600.$

Using the information from the requirements above, complete the 'Analysis' tab. $($Round final answers to $1$ decimal place.$)$

Analyze how well TNT Fireworks manages its assets:

$($a$)$ Calculate the return on assets ratio for the month of January. If the average return on assets for the industry in January is

$2\%,$ is the company more or less profitable than other companies in the same industry?

The return on assets ratio is:

The company is more profitable. $($True or False$)$

$($b$)$ Calculate the profit margin for the month of January. If the industry average profit margin is $5\%,$ is the company more or less

efficient at converting sales to profit than other companies in the same industry?

$($c$)$ Calculate the asset turnover ratio for the month of January. If the industry average asset turnover is $0\mathrm{.}4$ times per month, is

the company more or less efficient at producing revenues with its assets than other companies in the same industry?