Refer to Exercise 3-38B.

Requirements
1. Use the data in the partial worksheet to prepare Emerson Production Company's classified balance sheet at December 31 of the current year. Use the report format. First you must compute the adjusted balance for several of the balance-sheet accounts.
2. Compute Emerson Production Company's net working capital, current ratio, and debt ratio at December 31. A year ago, the net working capital was $5,790, the current ratio was 1.61, and the debt ratio was 0.23. Indicate whether the company's ability to pay its debts-both current and total-improved or deteriorated during the current year.

Transcribed Image Text:

Emerson Production Company Unadjusted Trial Balance From the Adjusted Trial Balance Account Cash Prepaid rent Equipment Accumulated depreciation-equipmen Accounts payable Salary payable Unearned Income tax payable 13,690 1,500! 42,000 3,200 4,300 service revenue 9,100 Notes payable long-term. 11,000 8,300 15,090 Common stock Retained earnings Dividends Service revenue Salary expense Rent expense Depreciation expense-equipment Income tax expense Total 1.400 13,400 19,700 4,500 ,300 5,300 1,800 800 1400 9,30019,700