Comprehensive: Balance Sheet, Schedules, and Notes The following is an alphabetical listing of Stone Boat Company's balance sheet accounts and account balances on December 31, 2019: Accounts Payable $44,200 Income Taxes Payable Accounts Receivable Inventory 37,100 109,300 20,000 Accumulated Depreciation Additional Paid-in Capital on Common Stock Additional Paid-in Capital on Preferred Stock Investment in Affiliate Long-Term Liabilities (book value) Miscellaneous Current Payables 3,200 Allowance for Doubtful Accounts 1,600 Notes Receivable Bond Sinking Fund 12,500 Preferred Stock Cash 13,800 Property, Plant, and Equipment Retained Earnings Common Stock 80,000 Additional information: 1. The company reports on the balance sheet the net book value of pro and equipment and long-term liabilities (known as control accounts). The related details are disclosed in the notes. 2. The straight-line method is used to depreciate property and equipment based upon cost, estimated residual value, and estimated life. The costs of the assets in this account are: land, $29,500; buildings, $164,600; store fixtures, $72,600; and office equipment, $30,000. 3. The accumulated depreciation breakdown is as follows: buildings, $54,600; store fixtures, $37,400; and office equipment, $17,300. 4. The long-term debt includes 12%, $36,000 face value bonds that mature on December 31, 2024, and have an unamortized bond discount of $1,000; 11%, $48,000 face value bonds that mature on December 31, 2025, have a premium on bonds payable of $1,800, and whose retirement is being funded by a bond sinking fund; and a 13% note payable that has a face value of $6,200 and matures on January 1, 2022. 5. The non-interest-bearing note receivable matures on June 1, 2023. 6. Inventory is listed at lower of cost or market; cost is determined on the basis of average cost. 7. The investment in affiliate is carried at cost. The company has guaranteed the interest on 12%, $50,000, 15-year bonds issued by this affiliate, Jay Company. 8. Common stock has a $10 par value per share, 10,000 shares are authorized, and 1,000 shares were issued during 2019 at a price of $13 per share, resulting in 8,000 shares issued at year-end. 9. Preferred stock has a $50 par value per share, 2,000 shares are authorized, and 140 shares were issued during 2019 at a price of $55 per share, resulting in 640 shares issued at year-end. 10. On January 15, 2020, before the December 31, 2019, balance sheet was issued, a building with a cost of $20,000 and a book value of $7,000 was totally destroyed. Insurance proceeds will amount to only $5,000. 1. Net income and dividends declared and paid during the year were $50,500 and $21,000, respectively. Required: 1. Prepare Stone Boat's December 31, 2019, balance sheet. Stone Boat Company Balance Sheet December 31, 2019 Assets Current Assets: $ $ Long-Term Investments: $ Total long-term investments $ Total property, plant, and equipment Total Assets $ Liabilities Current Liabilities: $ Total current liabilities $ Long-term liabilities Total Liabilities $ Shareholders' Equity Contributed Capital: $ Total contributed capital $ Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $ 2. Prepare a statement of shareholders' equity for 2019. (Hint: Work back from the ending account balances.) STONE BOAT COMPANY Statement of Shareholders' Equity For Year Ended December 31, 2019 Preferred Common Stock Stock $50 par $10 par Additional Additional Paid-in Paid-in Capital Capital on on Preferred Common Stock Stock Retained Earnings Total Balances, 1/1/19 Preferred Common Stock Stock $50 par $10 par Paid-in Capital on Preferred Stock Paid-in Capital on Common Stock Retained Earnings Total Balances, 1/1/19 $ Balances, 12/31/19 3. Next Level Compute the debt-to-assets ratio at the end of 2019. Round your answer to one decimal place. % What is your evaluation of this ratio if it was 39% at the end of 2018? The debt ratio for 2019 has by over compared to 2018. This indicates that there may be slightly risk for investors and creditors because of interest payments that may have to be made by the company. On the other hand, may benefit if the company can make a higher return on the additional debt equity than the interest paid