Angel Martin is a young entrepreneur who operates Martin Music Services, offering singing lessons and instruction on musical instruments. Martin wishes to expand but needs a $30,000 loan. The bank requests that Martin prepare a balance sheet and key financial ratios. Martin has not kept formal records but is able to provide the following accounts and their amounts as of December 31, 2017.

The total equity amount reflects all owner investments, withdrawals, revenues, and expenses as of December 31, 2017.
Required
1. Prepare a balance sheet as of December 31, 2017, for Martin Music Services. (Report only the total equity amount on the balance sheet.)
2. Compute Martin's debt ratio and its return on assets (the latter ratio is defined in Chapter 1). Assume average assets equal its ending balance.
3. Do you believe the prospects of a $30,000 bank loan are good? Why or why not?

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1,500 50,000 62,900 $ 3,600 Accounts Recelvable. $ 9,600 Prepald Insurance Cash. Prepald Rent Accounts Payable Annual net Income 9,400 2,200 40,000 Store Supplles. Unearned Lesson Fees. 6,600 Equlpment 15,600 Total Equity"