On January $1,2024,$ the general ledger of Big Blast Fireworks included the following account balances: Big Blast Fireworks

Multiple$-$Step Income Statement

For the year ended January $31,2024$ Big Blast Fireworks

Classified Balance Sheet

January $31,2024$

$\backslash$table$[[$Assets$,$Liabilities$],[$Current Assets:,Current Liabilities:$],[,,,],[,,?,],[,,,],[,,,],[,,$Total Current Liabilities,$0],[,,,],[,,,],[,,,],[$Total Current Assets,$0,$Total Liabilities,$0],[$Noncurrent Assets:,Stockholders' Equity$],[,,,],[,,,],[,,,],[,,$Total Stockholders' Equity,$0],[$Total Assets,$$,$Total Liabilities & Stockholders' Equity,$$]]$ Analyze how well Big Blast Fireworks' manages its inventory:

$($a$)$ Calculate the inventory turnover ratio for the month of January. If the industry average of the inventory turnover ratio for the month of January is $14\mathrm{.}7$ times, is the company

managing its inventory more or less efficiently than other companies in the same industry?

$($b$)$ Calculate the gross profit ratio for the month of January. If the industry average gross profit ratio is $34\%,$ is the company more or less profitable per dollar of sales than other

companies in the same industry?

$($c$)$ Used together, what might the inventory turnover ratio and gross profit ratio suggest about Big Blast Fireworks' business strategy? Is the company's strategy to sell a higher

volume of less expensive items or does the company appear to be selling a lower volume of more expensive items?

Based on the inventory turnover ratio and the gross profit ratio, Big Blast Fireworks' business strategy appears to be selling a higher volume of less expensive items

The $$31,000$ beginning balance of inventory consists of $310$ units, each costing $$100.$ During January $2024,$ Big Blast Fireworks had

the following inventory transactions:January $8$ Purchased $1,100$ units for $$122,100$ on account $($$$111$ each$).$

January $12$ Purchased $1,200$ units for $$139,200$ on account $($$$116$ each$).$

January $15$ Returned $105$ of the units purchased on January $12$ because of defects.

January $19$ Sold $3,400$ units on account for $$544,000.$ The cost of the units sold is determined using a FIFO perpetual inventoryJanuary $22$ Received $$489,000$ from customers on accounts receivable.

January $24$ Paid $$319,000$ to inventory suppliers on accounts payable.

January $27$ Wrote off accounts receivable as uncollectible, $$2,600.$

January $31$ Paid cash for salaries during January, $$115,000.$The following information is available on January $31,2024.$

a$.$ At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $$100$

each.

b$.$ At the end of January, $$4,100$ of accounts receivable are past due, and the company estimates that $45\%$ of these accounts will

not be collected. Of the remaining accounts receivable, the company estimates that $5\%$ will not be collected.

c$.$ Accrued interest expense on notes payable for January. Interest is expected to be paid each December $31.$

d$.$ Accrued income taxes at the end of January are $$12,400.$

Record each of the transactions listed above in the "General Journal" tab $($these are shown as items $1-10)$ assuming

a perpetual FIFO inventory system. Review the "General Ledger" and the "Trial Balance" tabs to see the effect of the

transactions on the account balances.

Record adjusting entries on January $31$ in the "General Journal" tab $($these are shown as items $11-14).$

Review the adjusted "Trial Balance" as of January $31,2024,$ in the "Trial Balance" tab.

Prepare a multiple$-$step income statement for the period ended January $31,2024,$ in the "Income Statement" tab.

Prepare a classified balance sheet as of January $31,2024,$ in the "Balance Sheet" tab.

Record the closing entries in the "General Journal" tab $($these are shown as items $15-16).$

Using the information from the requirements above, complete the "Analysis" tab.