Changes Co Calculate the ratios and explain what they tell us about the company - how can we use them to assess the health of the company. (Ratios can be found throughout the text and in Chapter 17.) How does the company compare to others in the industry on the ratios? Assume that the industry average for the ratios are as follows: Current Ratio 3.5% Profit Margin 40% Debt to Equity 10% Last, the owner is thinking about incorporating the business. Give her some advantages and disadvantages, especially in light of the activities of this business Use proper memo format for this portion of the assignment, Complete your memo in Word, Use your most professional business writing, correct grammar and spelling, and be thorough but brief. The memo should be approximately 1 - 1.5 pages. December Transactions: Dec. 1 Kim Canoe, Owner, contributed land on the river (worth $85,000) and a small building to use as a rental office (worth $35,000) in exchange for capital. (First transaction has been done for you - see Journal Entries and T-Accounts) Prepaid $3,000 for three months rent on the warehouse where the company stores the canoes_ 2 Purchased canoes signing a note payable for $12,000 4 Purchased office supplies on account for $600. 9 Received $5,000 cash for canoe rentals to customers. 15 Rented canoes to customers for $4.800. but will be paid next month 16 Received a $1,000 deposit from a customer that will use the canoes throughout the next 30 days. 18 Paid the utilities ($200) and telephone bills ($100) from last month. 19 Paid various accounts payable. $2.300. 20 Received bills for the telephone ($150) and utilities ($250) which will be paid later. 30 Paid wages of $1,900. 31 Wilson Canyon withdrew cash of $1,000 from the business. Adjusting Entries (see Chapter 3 for examples of adjusting entries) At December 31, the business gathers the following information for the adjusting entries: a. Office supplies on hand, $400 b. Rent of one month has been used. (Hint: see Chapter 3 for adjusting for prepaids) c. Determine the depreciation on the building using straight-line depreciation. Assume thecomments Tracking Changes 5 Adjusting Entries (see Chapter 3 for examples of adjusting entries) At December 31, the business gathers the following information for the adjusting entries: a. Office supplies on hand, $400 b. Rent of one month has been used. (Hint: see Chapter 3 for adjusting for prepaids) Determine the depreciation on the building using straight-line depreciation. Assume the useful life of the building is five years and the residual value is $5,000. (Hint: The building was purchased on December 1.) d. $500 of unearned revenue has now been earned e. The employee who has been working the rental booth has earned $1,200 in wages that will be paid January 5. 2022. f. Canyon Canoe Company has earned $2.000 of canoe rental revenue that has not been recorded or received. g. Determine the depreciation on the canoes purchased on November 3 using straight-line depreciation. Assume the useful life of the canoes is 4 years and the residual value is $0 No depreciation has been recorded yet, so there is two months of depreciation. h. Determine the depreciation on the canoes purchased on December 2 using straight-line depreciation. Assume the useful life of the canoes is 4 years and the residual value is $0 i. Interest expense accrued on the notes payable, $50.racking Changes Comprehensive Problem - Canyon Canoe Company Canyon Canoe Company is a service-based company that rents canoes for use on local lakes a rivers. Wilson Canyon graduated from college about 10 years ago with a BS in Business. Because she loves the outdoors, she has decided to begin a new business that will combine her love of outdoor activities with her business knowledge. Canyon decides that she will create a new sole proprietorship, Canyon Canoe Company. The business began operations on Novemb 1, 2022. The transactions for November have already been recorded and posted i ccounts. Requirements: Part 1: Financial Statement Preparation: Now we are at the end of December. The transactions for December are shown below. You will need to do the following Record the transactions in a journal using correct journal entry format b. Post the journal entries to the ledger (T-Accounts). Total the T-Accounts d. Prepare the unadjusted Trial Balance Record the adjusting journal entries based on the information below. (Post the adjusting entries to the T-Accounts. In the T-accounts, denote each adjusting amount as adj. and an account balance as Bal Prepare an Adjusted Trial Balance. g. Prepare the income statement of Canyon Canoe Company for the two months ended December 31, 2022. h. Prepare the statement of owner's equity for the two months ended December 31, 2022. Prepare the balance sheet as of December 31, 2022 VERY IMPORTANT: Remember, the entries from November have already been recorded. The beginning balances in the T-Accounts as of December 1" represent the ending balances a lives as of November 30th. Don't forget to account for the beginning balances when you total your T-Accounts. Part 2: Financial Stateme Analysis: As the accountant for the company, you will need to write a memo to the owner making an analysis of the financial position at December 3 13. Make your analysis of the health of the company using the following calculations & ratios Working Capital Current Ratio Profit Margin Debt to Equity