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Exercise $8-19($Static$)$ Complete the accounting cycle $($LO$8-1,8-2,8-4,8-6)$

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

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AccountsDebitCreditCash$ $25,100$Accounts Receivable$46,200$Allowance for Uncollectible Accounts$$$ $4,200$Inventory$20,000$Land$46,000$Equipment$15,000$Accumulated Depreciation$1,500$Accounts Payable$28,500$Notes Payable $(6\%,$ due April $1,2025)50,000$Common Stock$35,000$Retained Earnings$33,100$Totals$ $152,300$$ $152,300$

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During January $2024,$ the following transactions occur:

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January $2$Sold gift cards totaling $$8,000.$ The cards are redeemable for merchandise within one year of the purchase date.January $6$Purchase additional inventory on account, $$147,000.$ ACME uses the perpetual inventory system.January $15$Firework sales for the first half of the month total $$135,000.$ All of these sales are on account. The cost of the units sold is $$73,800.$January $23$Receive $$125,400$ from customers on accounts receivable.January $25$Pay $$90,000$ to inventory suppliers on accounts payable.January $28$Write off accounts receivable as uncollectible, $$4,800.$January $30$Firework sales for the second half of the month total $$143,000.$ Sales include $$11,000$ for cash and $$132,000$ on account. The cost of the units sold is $$79,500.$January $31$Pay cash for monthly salaries, $$52,000.$

Exercise $8-19($Static$)$ Part $7$

$7.$ Analyze the following for ACME Fireworks:

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Requirement $1$:

a$-1.$ Calculate the current ratio at the end of January.

a$-2.$ If the average current ratio for the industry is $1\mathrm{.}8,$ is ACME Fireworks more or less liquid than the industry average?

Requirement $2$:

b$-1.$ Calculate the acid$-$test ratio at the end of January.

b$-2.$ If the average acid$-$test ratio for the industry is $1\mathrm{.}5,$ is ACME Fireworks more or less likely to have difficulty paying its currently maturing debts $($compared to the industry average$)?$

Requirement $3$:

c$-1.$ Assume the notes payable were due on April $1,2024,$ rather than April $1,2025.$ Calculate the revised current ratio at the end of January.

c$-2.$ Indicate whether the revised ratio would increase, decrease, or remain

unchanged.