Question

Need help answering the requirements 1-5.

A Read an P4-30A Preparing financial statements including a classified balance sheet in report form, preparing closing entries, and using the current ratio to evaluate a company The adjusted trial balance of Boston Irrigation System at December 31, 2018, follow Page view Fit to width + BOSTON IRRIGATION SYSTEM Adjusted Trial Balance December 31, 2018 Balance Account Title Debit Cash Credit 5 11,800 Accounts Receivable 46,000 Office Supplies 29,500 Prepaid Insurance 6,300 Building 63,000 Accumulated Depreciation Building $ 25,000 Equipment 28.000 Accumulated Depreciation-Equipment 7,700 Accounts Payable 32.100 Interest Payable 2,200 Salaries Payable 2,600 Unearned Revenue 2,100 Notes Payable (long-term) 32,700 Boston, Capital 33,000 Boston, Withdrawals 2.200 Service Revenue 74.500 Insurance Expense 1.100 Salaries Expense 16,400 Supplies Expense 1.100 Interest Expense 2,200 2.500 Depreciation Expense-Equipment Depreciation Expense-Building $ 211,900 $ 211,900 Total - 1800 Requirements 1. Prepare the company's income statement for the year ended December 31, 2018 2. Prepare the company's statement of owner'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 desified balance sheet in report format December 31, 2018 4. Journalire 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 23. Did the company's ability to pay current debts improve or deteriorate, or did it remain the same?

Answer 1

Boston Irrigation System 74500 Statement of Income For the peiod Ending 31.12.2018 Service Revenue Less: Insurance Expense Salaries Expense Supplies Expense Interest Expense Depreciation Expense - Equipment Depreciation Expense - Building Net Income 1100 16400 1100 2200 2500 1800 25100 49400 Statement Owner Equity For the peiod Ending 31.12.2018 Boston Capital Add:Net Income 33000 49400 82400 -2200 80200 Less:Boston, Withdrawals

Amounts in $ Amounts in $ Balance sheet As at 31.12.2018 Assets Current Assets Cash Accounts Receivable Office Supplies Prepaid Insurance Amounts in $ Amounts in $ Liabilities Current Liabilities 11800 Accounts Payable 46000 Interest Payable 29500 Salaries Payable 6300 93600 Unearned Revenue 32100 2200 2600 2100 39000 32700 Non Current Assets Building Accumulated Depre - Build Equipment Accumulated Depre - Equip Total Assets 63000 -25000 28000 -7700 Non Current Liabilities Notes Payable 38000 Owner's Equity 20300 Boston Capital 151900 Total Liabilities & Shareholders Equity 80200 151900 Current Ratio = Current Assets / Current Liabilities = 93600 / 39000 = 2.4 Yes the current ratio has improved

Credit in $ Closing Enteries Date Particulars Debit in $ 31.12.2018 Income Summary a/c Dr. 25100 To Insurance Expense To Salaries Expense To Supplies Expense To Interest Expense To Depreciation Expense - Equipment To Depreciation Expense - Building (Expense accounts closed) 1100 16400 1100 2200 2500 1800 74500 31.12.2018 Service Revenue a/c Dr. To Income Summary (Revenue accounts closed) 74500 49400 31.12.2018 Income Summary a/c Dr. To Boston Capital (Profits transferred) 49400 2200 31.12.2018 Boston Capital a/c Dr. To Boston, Withdrawals (Drawings recorded) 2200