Refer to Exercise 3-37B.

Requirements
1. Use the data in the partial worksheet to prepare Lauer Production Company’s classified balance sheet at December 31 of the current year. Use the report format. First you must calculate the adjusted balance for several of the balance-sheet accounts.

2. Calculate Lauer Production Company’s net working capital, current ratio, and debt ratio at December 31. A year ago, the net working capital was $10,600, the current ratio was 2.40, and the debt ratio was 0.50. Indicate whether the company’s ability to pay its debts—both current and total improved or deteriorated during the current year.

Data from Exercise 3-37B.

The unadjusted trial balance and income statement amounts from the December 31 adjusted trial balance of Lauer Production Company follow:

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A1 Lauer Production Company Adjusted Trial Balance Unadjusted Trial Balance Adjustments 2 Account 3 Cash 4 Prepaid rent 5 Equipment 6 Accumulated depreciation-equipment 7 Accounts payable 8 Salary payable 9 Unearned service revenue 10 Income tax payable 11 Notes payable, long-term 12 Common stock 13 Retained earnings 14 Dividends 15 Service revenue 16 Salary expense 17 Rent expense 18 Depreciation expense-equipment 19 Income tax expense 20 Total 21 18,000 1,000 45,000 6,100 4,300 8,900 15,000 8,100 15,400 1,500 20,900 13,500 5,000 1,800 950 1,400 9,150 4,700 1,100 71,300 71,300 20,900