The adjusted trial balance of Martinez Advertising​ Services, at December 31​, 2024​, follows. This is the first year of operations. Requirements 1. Prepare the income statement for the year ended December 31​, 2024. 2. Prepare the statement of​ owner's equity for the year ended December 31​, 2024. Assume the owner had no additional contributions during the year. 3. Prepare the classified balance sheet at December 31​, 2024. Use the report form. 4. Calculate the current ratio at December 31​, 2024. 5. Journalize and post the closing entries. Indicate the balance of the Martinez​,Capital account after the closing entries are posted. 6. Prepare a​ post-closing trial balance at December

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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The adjusted trial balance of Martinez Advertising​ Services, at December 31​, 2024​, follows. This is the first year of operations.

Requirements
1.
Prepare the income statement for the year ended December 31​, 2024.
2.
Prepare the statement of​ owner's equity for the year ended December 31​, 2024. Assume the owner had no additional contributions during the year.
3.
Prepare the classified balance sheet at
December 31​, 2024. Use the report form.
4.
Calculate the current ratio at December 31​, 2024.
5.
Journalize and post the closing entries. Indicate the balance of the
Martinez​,Capital account after the closing entries are posted.
6.
Prepare a​ post-closing trial balance at
December
31​,2024.
Data table
Account Title
Cash
Adjusted Trial Balance
December 31, 2024
Accounts Receivable
Office Supplies
Land
Building
Accumulated Depreciation-
Building
Furniture
Accumulated Depreciation-
Furniture
Accounts Payable
Salaries Payable
Unearned Revenue
Notes Payable (long-term)
Martinez, Capital
Martinez, Withdrawals
Service Revenue
Salaries Expense
Supplies Expense
Depreciation Expense-
Building
Depreciation Expense-
Furniture
Advertising Expense
Total
Print
Balance
Debit
6,000
6,300
200
10,000
42,000
8,000
25,000
16,500
800
1,000
Credit
Done
24,000
6,000
2,000
500
5,000
7,000
12,000
64,300
2,000
3,000
$ 120,800 $ 120,800
X
Transcribed Image Text:Data table Account Title Cash Adjusted Trial Balance December 31, 2024 Accounts Receivable Office Supplies Land Building Accumulated Depreciation- Building Furniture Accumulated Depreciation- Furniture Accounts Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Martinez, Capital Martinez, Withdrawals Service Revenue Salaries Expense Supplies Expense Depreciation Expense- Building Depreciation Expense- Furniture Advertising Expense Total Print Balance Debit 6,000 6,300 200 10,000 42,000 8,000 25,000 16,500 800 1,000 Credit Done 24,000 6,000 2,000 500 5,000 7,000 12,000 64,300 2,000 3,000 $ 120,800 $ 120,800 X
Expert Solution
Step 1

The current ratio is very important because it indicates liquidity in terms of the short-term debt payment. It means it is used to measure whether the entity can pay off short-term obligations. If the current ratio is lower it means the company facing difficulty in paying short-term debt.

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