On January 1, 2024, the general ledger of 3D Family Fireworks includes the following account balances:AccountsCashAccounts ReceivableAllowance for Uncollectible AccountsSuppliesNotes Receivable (6%, due in 2 years)LandAccounts PayableCommon StockRetained EarningsTotalsDebit$27,30015,3004, 20021,00080,600a-1. The receivables turnover ratio isa-2. The company collecting cash from customersb-1. Allowance for Uncollectible Accounts ratiob-2. The company expects an$148,400Credit$1,600During January 2024, the following transactions occur:January 2January 6Provide services to customers for cash, $52,100.Provide services to customers on account, $89,400.January 15Write off accounts receivable as uncollectible, $3,900. (Assume the company uses the allowance method)Pay cash for salaries, $33,100.January 20January 22Receive cash on accounts receivable, $87,000.January 25Pay cash on accounts payable, $7,200.January 30 Pay cash for utilities during January, $15,400.%11,700101,00034,100$148,4007. Analyze how well 3D Family Fireworks manages its receivables:a-1. Calculate the receivables turnover ratio for the month of January. (Hint: For the numerator, use total services provided tocustomers on account.) (Round your final answer to 1 decimal place.)a-2. If the industry average of the receivables turnover ratios for the month of January is 5.2 times, is the company collecting cash fromcustomers more or less efficiently than other companies in the same industry?b-1. Calculate the ratio of Allowance for Uncollectible Accounts to Accounts Receivable at the end of January. (Round percentage to 1decimal place.)b-2. Based on a comparison of this ratio to the same ratio at the beginning of January, does the company expect an improvement orworsening in cash collections from customers on credit sales?

Accounts receivable is the total amount that is to be received from a customer in exchange for goods…

7. Analyze how well 3D Family Fireworks manages its receivables: a-1. Calculate the receivables turnover ratio for the month of January. (Hint: For the numerator, use total services provided to customers on account.) (Round your final answer to 1 decimal place.) a-2. If the industry average of the receivables turnover ratios for the month of January is 5.2 times, is the company collecting cash from customers more or less efficiently than other companies in the same industry? b-1. Calculate the ratio of Allowance for Uncollectible Accounts to Accounts Receivable at the end of January. (Round percentage to 1 decimal place.) b-2. Based on a comparison of this ratio to the same ratio at the beginning of January, does the company expect an improvement or worsening in cash collections from customers on credit sales?

7. Analyze how well 3D Family Fireworks manages its receivables: a-1. Calculate the receivables turnover ratio for the month of January. (Hint: For the numerator, use total services provided to customers on account.) (Round your final answer to 1 decimal place.) a-2. If the industry average of the receivables turnover ratios for the month of January is 5.2 times, is the company collecting cash from customers more or less efficiently than other companies in the same industry? b-1. Calculate the ratio of Allowance for Uncollectible Accounts to Accounts Receivable at the end of January. (Round percentage to 1 decimal place.) b-2. Based on a comparison of this ratio to the same ratio at the beginning of January, does the company expect an improvement or worsening in cash collections from customers on credit sales?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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