a.

[The following information applies to the questions displayed below.]

Ramirez Company is completing the information processing cycle at its fiscal year-end on December 31. Following are the correct balances at December 31 for the accounts both before and after the adjusting entries.

Trial Balance, December 31 of the Current Year
		Before Adjusting Entries				After Adjusting Entries
	Items		Debit		Credit		Debit		Credit
a.	Cash	$	13,500			$	13,500
b.	Accounts receivable						1,820
c.	Prepaid insurance		850				720
d.	Equipment		168,280				168,280
e.	Accumulated depreciation, equipment			$	42,100			$	48,100
f.	Income taxes payable								1,380
g.	Common stock and additional paid-in capital				112,000				112,000
h.	Retained earnings, January 1				19,600				19,600
i.	Service revenue				64,400				66,220
j.	Salary expense		55,470				55,470
k.	Depreciation expense						6,000
l.	Insurance expense						130
m.	Income tax expense						1,380
		$	238,100	$	238,100	$	247,300	$	247,300

Required:

1. Compare the amounts in the columns before and after the adjusting entries to reconstruct the adjusting entries made in the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b.

Compute the amount of income assuming that it is based on the amounts (a) before adjusting entries and (b) after adjusting entries.

-Compute earnings per share, assuming that 3,000 shares of stock are outstanding all year. (Round your answer to 2 decimal places.)

Earnings per share=

Compute the total asset turnover ratio, assuming total assets at the beginning of the year were $110,000. If the industry average is 0.49. (Round your answer to 3 decimal places.)

Total Asset Turnover Ratio=

c.

Record the closing entry at December 31 of the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet 2 4. Record the adjusting journal entry related to revenue. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal