(a) Use the information in the adjusted trial balance reported in Exercise 3-21 to compute the current ratio for Wilson Trucking. 

(b) Assuming Spalding (a competitor) has a current ratio of 1.5, which company is better able to pay its short-term obligations?

Data from Exercise 3-21

Use the following adjusted trial balance at December 31 of Wilson Trucking Company to prepare the 

(1) Income statement 

(2) Statement of retained earnings, for the year ended December 31. 

The Retained Earnings account balance was $140,000 at December 31 of the prior year.

Transcribed Image Text:

Account Title Cash Accounts receivable... Office supplies .... Trucks... Accumulated depreciation-Trucks.... Land........ Accounts payable.... Interest payable.... Long-term notes payable.. Common stock ..... Retained earnings Dividends... Trucking revenue.. Depreciation expense-Trucks.. Salaries expense Office supplies expense... Interest expense... Totals...... Debit $ 8,000 17,500 3,000 172,000 85,000 20,000 23,500 61,000 8,000 12,000 $410,000 Credit $ 36,000 12,000 4,000 58,000 30,000 140,000 130,000 $410,000