Chapter 3, Problem 3.38BE

LO 3, 5

(Learning Objective 3, 5: Adjust the accounts, close the books) The unadjusted trial balance and income statement amounts from the December 31 adjusted trial balance of Lauer Production Company follow:

Requirement

  1. Journalize the adjusting and closing entries of Lauer Production Company at December 31. There was only adjustment to Service Revenue.

LO 4, 6

E3-38B. (Learning Objectives 4. 6: Construct the financial statements; analyze and evaluate liquidity and debt-paying ability) Refer to Exercise 3-37B.

Requirements

1. 1. Use the data in the partial worksheet to prepare Lauer Production Company’s classified balance sheet at December 31 of the current year. Use the report format First you must calculate the adjusted balance for several of the balance-sheet accounts.
2. 2. Calculate Lauer Production Company s net working capital, current ratio, and debt ratio at December 31. A year ago. the net working capital was $10,600, the current ratio was 2.40, and the debt ratio was 0.50. Indicate whether the company's ability to pay its debts—both current and total- improved or deteriorated during the current year.