Natalie had a very busy May. At the end of the month, after Natalie has journalized and posted her adjusting and correcting entries, and has prepared an adjusted trial balance.
Instructions
Using the information in the adjusted trial balance, do the following:
(a) Prepare an income statement for the two months ended May 31, 2017.
(b) Prepare a statement of owner's equity for the two months ended May 31, 2017, and a classified balance sheet at May 31, 2017.
(c) Calculate Santé Smoothies' working capital, current ratio, and acid-test ratio. Comment on Santé Smoothies' liquidity.
(d) Natalie has decided that her year end will be May 31, 2017. Prepare closing entries.
(e) Prepare a post-closing trial balance.
(f) Natalie had reviewed her unadjusted trial balance prior to pre- paring the adjusting journal entries. When Natalie initially recorded the purchase of the equipment in May for $725, she thought the equipment should be recorded as "supplies expense." After posting the original transaction, Natalie reviewed her accounting textbook, and remembered that the purchase of equipment should be recorded as an asset. She then made an entry to correct this error. Had she not made a correcting entry, would the financial statements have been misstated? How?

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SANTÉ SMOOTHIES Adjusted Trial Balance May 31, 2017 Debit $3,060 675 95 1,550 Credit Cash Accounts receivable Supplies Equipment Accumulated depreciation-equipment Accounts payable Unearned revenue Interest payable Notes payable, 396, principal and interest due April 15, 2018 N. Koebel, capital Revenue Advertising expense Salaries expense Telephone expense Supplies expense Depreciation expense Interest expense $ 66 100 3,000 1,725 1,225 325 48 174 211 $6,215 $6,215