Exercise 7-21 (Algo) Complete the accounting cycle using long-term asset transactions (LO7-4, 7-7) (GL)

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

Accounts	Debit	Credit
Cash	$ 60,600
Accounts Receivable	28,800
Allowance for Uncollectible Accounts		$ 4,100
Inventory	38,200
Notes Receivable (5%, due in 2 years)	34,800
Land	174,000
Accounts Payable		16,700
Common Stock		239,000
Retained Earnings		76,600
Totals	$ 336,400	$ 336,400

During January 2024, the following transactions occur:

January 1	Purchase equipment for $21,400. The company estimates a residual value of $3,400 and a five-year service life.
January 4	Pay cash on accounts payable, $11,400.
January 8	Purchase additional inventory on account, $101,900.
January 15	Receive cash on accounts receivable, $23,900.
January 19	Pay cash for salaries, $31,700.
January 28	Pay cash for January utilities, $18,400.
January 30	Firework sales for January total $239,000. All of these sales are on account. The cost of the units sold is $124,500.

The following information is available on January 31, 2024.

1. Depreciation on the equipment for the month of January is calculated using the straight-line method.
2. The company records an adjusting entry for $5,520 for estimated future uncollectible accounts.
3. The company has accrued interest on notes receivable for January.
4. Unpaid salaries owed to employees at the end of January are $34,500.
5. The company accrued income taxes at the end of January $10,900.

Exercise 7-21 (Algo) Complete the accounting cycle using long-term asset transactions (LO7-4, 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 equipsent for $21,400. The company estimates a residual value of $3,400 and a five-year service January 4 Pay cash on accounts payable, $11,400. January 8 Purchase additional inventory on account, $101,900. January 15 Receive cash on accounts receivable, $23,900. January 19 Pay cash for salaries, $31,700. January 28 Pay cash for January utilities, $18,400. January 30 Firework sales for January total $239,000. All of these sales are on account. The cost of the units sold is 5124,500 . 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 $5,520 for estimated future uncollectible accounts. c. The company has accrued interest on notes recelvable for January. d. Unpaid salaries owed to employees at the end of January are $34,500. e. The company accrued income taxes at the end of January $10,900. 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. Analyze how well TNT Fireworks manages its assets: a) Calculate the retum on assets ratio for the month of January. If the average retum on assets for the industry in January is %, is the company more or less profitable than other companies in the same industry? he 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 4%, is the company more or les ificient at converting sales to profit than other companies in the same industry? The profit margin it: he company is more eflicient at converting sales to profit. (True or False) c) Calculate the asset tumover ratio for the month of January. If the industry average asset furnover is 0.4 times per month. is he company more or less efficient at producing revenues with its assets than other companies in the same industry