Chapter D, Problem 5PSB

To determine

Concept introduction:

Balance sheet:

Balance sheet is a financial statement which is prepared at the end of accounting period. In other words, we can say that a statement which shows the balances of personal accounts and real accounts on a specified date. Thus, balance sheet is an financial statement which shows the balances of various assets, balances of shareholders’ equity and liabilities, etc.

Requirement 1:

To prepare:

Balance sheets as of December 31, 2018 and 2019.

To determine

Concept introduction:

Balance sheet:

Balance sheet is a financial statement which is prepared at the end of accounting period. In other words we can say that a statement which shows the balances of personal accounts and real accounts on a specified date. Thus balance sheet is an financial statement which shows the balances of various assets, balances of shareholders’ equity and liabilities etc.

Requirement 2:

Compute net income for 2019.

To determine

Concept introduction:

Balance sheet:

Balance sheet is a financial statement which is prepared at the end of accounting period. In other words we can say that a statement which shows the balances of personal accounts and real accounts on a specified date. Thus balance sheet is an financial statement which shows the balances of various assets, balances of shareholders’ equity and liabilities etc.

Requirement 3:

Compute the 2019 year-end debt ratio.