P4-30A 227 financial statements including a classified balance sheet in Completi
ID: 2571419 • Letter: P
Question
P4-30A
227 financial statements including a classified balance sheet in Completing the Accounting Cycde rt form, preparing closing entries, and using the current ratio to evaluate a company trial balance of Boston Irrigation System at December 31, 2018, follkonws The adjusted 2 Ending Capital $80,200 BOSTON RRIGATION SYSTERM Adjusted Trial Balance December 31, 2018 Account Title Debit 11,800 Credit 46,000 29,500 Cash Accounts Receivable Office Supplies Prepaid Insurance 6,300 63,000 Building Accumulated Depreciation-Buildi $ 25,000 Equipment 28,000 Accumulated Depreciation-Equipment 7,700 32,100 2,200 2,600 2,100 32,700 33,000 Accounts Payable Interest Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Boston, Capital Boston, Withdrawals Service Revenue Insurance Expense Salaries Expense Supplies Expense 2,200 74,500 1,100 16,400 1,100 2,200 2,500 1,800 $211,900 Interest Expense Depreciation Expense-Equipment Depreciation Expense Building Total 211,900 Requirements 1. Prepare the company's income statcment for the ycar ended December 31, 2018. 2. Prepare the company's statement of ownr's equity for the year ended December 31, 2018. Assume that there were no contributions made by the owner during the year 3. Prepare the company's classified balance sheet in report form at December 31,2018. 4. Journalize the closing entries for Boston Irrigation System. 5. Compute the company's current ratio at December 31, 2018. At December 31, 2017, the current ratio was 2.3. Did the company's ability to pay current debts improve or deteriorate, or did it remain the same?Explanation / Answer
1. Income statement
2. Statement of owners' equity
3. Classified balance sheet
4. Closing entries
5. Current ratio at December 31, 2018 = Current assets/ Current liabilities
= $93600/ $39000
= 2.4
The company's ability to pay current debts improved.
Revenue and income: Service revenue 74500 Total revenues $74500 Operating Expenses: Insurance expense 1100 Salaries expense 16400 Supplies expense 1100 Depreciation expense-equipment 2500 21100 Income from operations $53400 Non-operating expenses: Interest expense 2200 Depreciation expense-building 1800 4000 Net income $49400Related Questions
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