Account Debit Credit Cash $ 12,400 Accounts receivable 19,600 2,500 1,800 37,100 Supplies Prepaid rent Equipment Accumulated depreciationequipment Accounts payable Interest payable $ 5,000 9,600 300 Unearned service revenue 200 3,000 Income tax payable Note payable 18,200 Common stock 18,000 Retained earnings 4,000 Dividends 10,000 3,000 Income tax payable Note payable 18,200 Common stock 18,000 4,000 Retained earnings Dividends 10,000 Service revenue 93,600 Depreciation expense-equipment 1,100 Salary expense 40,500 Rent expense 11,000 Interest expense 2,600 Insurance expense 4,200 Supplies expense 2,200 6,900 Income tax expense $ 151,900 $ 151,900 Total Requirement 1. Prepare Smith Corporation's 2021 single-step income statement, statement of retained earnings, and balance sheet. Begin by preparing Smith's 2021 income statement. Smith Corporation Income Statement Year Ended October 31, 2021 Income before tax Now prepare the statement of retained earnings. (Include a subtotal after the "Add" line of the statement.) Smith Corporation Statement of Retained Earnings Year Ended October 31, 2021 Add: Subtotal Less: Balance Sheet October 31, 2021 Assets Liabilities ma Stockholders' Equity Less: Requirement 2. Smith's lenders require that the company maintain a debt ratio no higher than 0.50. Calculate Smith's debt ratio at October 31, 2021, to determine whether the company is in compliance with this debt restriction. If not, suggest a way that Smith could have avoided this difficult situation. Requirement 2. Smith's lenders require that the company maintain a debt ratio no higher than 0.50. Calculate Smith's debt ratio at October 31, 2021, to determine whether the company is in compliance with this debt restriction. If not, suggest a way that Smith could have avoided this difficult situation. Begin by selecting the labels and then enter the amounts to compute Smith's debt ratio at October 31, 2021. (Round your calculation to two decimal places.) + Debt ratio + = Smith's lenders require that the company maintain a debt ratio no higher than 0.50. Smith is with this debt restriction at October 31, 2021