Question

Requirement 1. Prepare the classified balance sheet of Sally O'Sullivan Dance Studio Company at August 31, 2018. Use the report form. You must compute the ending balance of Retained Earnings. Begin by preparing the asset section of the balance sheet, then prepare the liabilities section and finally the stockholders' equity section. Data Table Requirements Sally O'Sullivan Dance Studio Company Balance Sheet August 31, 2018 Assets 1. Prepare the classified balance sheet of Sally O'Sullivan Dance Studio Company at August 31, 2018. Use the report form. You must compute the ending balance of Retained Earnings. 2. Compute O'Sullivan's current ratio at August 31, 2018. One year ago, the current ratio was 1.88. Indicate whether O'Sullivan's ability to pay current debts has improved, deteriorated, or remained the same. Print Done Sally O'Sullivan Dance Studio Company Trial Balance August 31, 2018 Balance Account Title Debit Credit Cash $ 15,800 Office Supplies 3,000 Prepaid Rent 1,300 Equipment 46,000 Accumulated Depreciation Equipment $ 6,500 Accounts Payable Salaries Payable 600 Unearned Revenue 3,500 Less: Choose from any list or enter any number in the input fields and then click Check Ansy 5,000 4 parts * remaining Check Answer

Answer 1

Pa Assets 21 Solution 1 tatt liroh ite Balance sheet Sally o'sullivan Dance Studio - 1 as on 31. Aug. 2018 we 000 Aldap yono, or Amount ($) I. Current assets. - osrodta frituste 2 Cash alion 200 15800 office supplies. 3.000 Prepaid Rent fra 1300 II. Non-Cusdent Assets into sesiune Equipment $46000 Less: Accumulated Dop. ($6500) 39,500 Total assets & 1 59, 600 liabilities obert ooo, El Amount ($ I Cursent liabilities: - Account Payable 5,000 Salaries Payable 600 unearned service Revenue 3,500 TV Non-Current liabilities Notes payable (long-team) 14,000 o wher's Eanity Common stock $20,000 Retained ear wing $ 26,500 46,500 Total erabilities 159,600

ension statement of stockholder's Eauity Particular Common Retained Total stock Earnings C$ voronc $) Balance 20,000 1 18,000 38,000 - Add? Net Income 9300 93.00 our beroes (800) less! (800) dividend Ending Balance 20,000 Not 26,500 1 46,500 DOO Des 2010. We solution - Calculation of Cursent Patio Current Ratio - Current assets Current liabilities Current assets = 15800 + 3000 + 1300 = $ 20,100 Current liabilities - 5,000 + 600 +3,500 = $ 9,100 Current Ratio = $20,100 20. $9,100 = 2.21. 1 Comments: - Current patio of o'sullivan has been improved as compared to to Pations one year ago Reclio which was 2.88. Improved Current Patio shows that o'suvillan's ability to pay debts has improved.

& Working Notes: 0 trondist Calculation of Net Income Service Revenues 16,800 o less: Expenses :- 0000 slo DEP ANDA! salaries expense 41600 Rent expense 1600 bolivie 2 Depreciation on 200 had ribi Suppos expert боо eitot torru utilities expense 500 (7500) Net Income $9,300 0909