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Learning Objectives 4, 6: Construct the financial statements; analyze and evaluate liquidity and debt-paying ability) Refer to Exercise 3-44B....
Learning Objectives 4, 6: Construct the financial statements; analyze and evaluate liquidity and debt-paying ability) Refer to Exercise 3-44B. ▶ Requirements 1. Use the data in the partial worksheet to prepare Durkin Production Company’s classified balance sheet at December 31 of the current year. Use the report format. First you must compute the adjusted balance for several of the balance-sheet accounts. 2. Compute Durkin Production Company’s net working capital, current ratio and debt ratio at December 31. A year ago, the net working capital was $7,000, the current ratio was 1.70, and the debt ratio was 0.40. Indicate whether the company’s ability to pay its debts—both current and total—improved or deteriorated during the current year.
Answer:JournalDATE ACCOUNT TITLES Debit Credit Closing EntriesDec. 31 Service RevenueOther Revenue…Retained Earnings 24,300200 31 Retained EarningsCost of Services SoldSelling, General,...