Chapter D, Problem 5PSA

The accounting records of Nettle Distribution show the following assets and liabilities as of December 31,

. Required

1. Prepare balance sheets for the business as of December 31,2018 and 2019. Hint: Report only total equity on the balance sheet and remember that total equity equals the difference between assets and liabilities.
2. Compute net income for 2019 by comparing total equity amounts for these two years and using the following information: During 2019, the owner invested $35,000 additional cash in the business (in exchange for common stock) and the company paid a $19,000 cash dividend.
3. Compute the 2019 year-end debt ratio (in percent and rounded to one decimal).

Problem D-5A
Computing net income from equity analysis, preparing a balance sheet and computing the debt ratio
C2 A1 A2 P3