Len Thomas, the accountant for Lancaster Consulting, prepared the work sheet shown on the next page on a computer spreadsheet but has lost much of the data. The only particular item Thomas can recall is that there was an adjustment made to correct an error made where $600 of supplies, purchased on credit, had been incorrectly recorded as $600 of equipment.

Required
1. Complete the work sheet by filling in the missing data.
2. Journalize the closing entries that would be required on December 31, 2014. Include explanations.
3. Prepare the company's classified balance sheet at December 31, 2014 in report format.
4. Compute Lancaster Consulting's current ratio and debt ratio for December 31, 2014. On December 31, 2013, the current ratio was 2.14 and the debt ratio was 0.47. Comment on the changes in the ratios.
5. If this company reported under IFRS, how might the balance sheet presentation differ from that prepared in Requirement 3?

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LANCASTER CONSULTING Work Sheet For the Year Ended December 31, 2014 Adjusted Trial Balance Balance Sheet Trial Balance Adjustments Income Statement Account Title Debit Debit Credit Debit Credit Credit Debit Credit Debit Credit Cash 19,000 19,000 Accounts receivable 20,400 20,700 Supplies Prepaid insurance Equipment Accum. amort.equip. 2,850 (b) 1,200 3,000 2,400 41,250 40,650 3,600 5,400 Building Accum. amort.- bldg. 90,000 90,000 6,000 (e) 3,000 Land 45,000 45,000 Accounts payable 7,500 Interest payable Wages payable 4,500 1,800 (f) 900 5,250 (g) 750 Unearned consulting fees 75,000 Mortgage payable L. Lancaster, capital 75,000 61,500 61,500 L. Lancaster, withdrawals 9,000 9,000 9,000 Consulting fees earned Wages expense 127,450 128,500 51,150 50,250 Insurance expense 6,600 4,500 Interest expense Utilities expense 750 750 Supplies expense Amort. exp.-equip. Amort. exp.-bldg. (b) 1,200 1,200 (d) 1,800 1,800 Totals 292,600 292,600