a1. Calculate the current ratio at the end of January.

Current Ratio

Choose Numerator / Choose Denominator = Current Ratio

a2. If the average current ratio for the industry is 1.80, is ACME Fireworks more or less liquid than the industry average?

more liquid or less liquid

b1. Calculate the acid-test ratio at the end of January.

Acid-test Ratio

Choose Numerator / Choose Denominator = Acid-test Ratio

b2. If the average acid-test ratio for the industry is 1.50, is ACME Fireworks more or less likely to have difficulty paying its currently maturing debts (compared to the industry average)?

more likely or less likely

c1. Assume the notes payable were due on April 1, 2021, rather than April 1, 2022. Calculate the revised current ratio at the end of January.

Current Ratio

Choose Numerator / Choose Denominator = Current Ratio

c2. Indicate whether the revised ratio would increase, decrease, or remain unchanged.

decrease the current ratio, increase the current ratio, or remain unchanged

Required information [The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Accounts Credit Cash Debit $ 26,100 48,200 $ 5,200 21,000 56,000 20,000 Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (61, due April 1, 2022) Common Stock Retained Earnings Totale 2,500 29,500 60,000 45,000 29,100 $171,300 $171,300 During January 2021, the following transactions occur January 2 Sold gift cards totaling $10,000. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase additional inventory on account, $157,000. January 15 Firework soles for the first half of the month total $145,000. All of these sales are on account. The cost of the units sold is $78,800. January 23 Receive $126,400 from customers on accounts receivable. January 25 Pay $100,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $5,800. January 30 Pirework sales for the second half of the month total $153,000. Sales include $16,000 for cash and $137,000 on account. The cost of the units sold is $84,500. January 31 Pay cash for monthly salaries, $53,000