HORNGREN'S ACCOUNTING - 12th Edition P4-36B Requirements 1. Prepare the company's income statement for the year ended December 31, 2018. 2. Prepare the company's statement of owner's equity for the year ended December 31, 2018. Assume that there were no contributions made by the owner during the year. 3. Prepare the company's classified balance sheet in report form at December 31, 2018 4. Journalize the closing entries for Bradley Irrigation System 5. Compute the company's current ratio at December 31, 2018. Al December 31, 2017, the current ratio was 1.7. Did the company's ability to pay debts improve or deteriorate, or did it remain the same? Solution: Requirement 1 BRADLEY IRRIGATION SYSTEM Income Statement Year Ended December 31, 2018 BRADLEY IRRIGATION SYSTEM Statement of Owner's Equity Year Ended December 31, 2018 Page 75 of 131 Chapter 4: Completing the Accounting Cycle fainn height.7290 Trang | HORNGREN'S ACCOUNTING - 12th Edition Requirement 3 BRADLEY IRRIGATION SYSTEM Balance Sheet December 31, 2018 Assets Liabilities Owner's Equity HORNGREN'S ACCOUNTING - 12th Edition Requirement 4 Date Accounts and Explanation Debit Credit Requirements Learning Objectives 1, 3, 6 P4-36B Preparing financial statements including a classified balance sheet in report form, preparing closing entries, and using the current ratio to evaluate a company The adjusted trial balance of Bradley Irrigation System at December 31, 2018, follows: 2. Ending Capital $73,200 BRADLEY IRRIGATION SYSTEM Adjusted Trial Balance December 31, 2018 Balance Debit Credit $ 12,000 51,000 28,300 4,700 57,300 $ 25,300 21,000 6,800 Account Title Cash Accounts Receivable Office Supplies Prepaid Insurance Building Accumulated Depreciation-Building Equipment Accumulated Depreciation-Equipment Accounts Payable Interest Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Bradley, Capital Bradley, Withdrawals Service Revenue Insurance Expense Salaries Expense Supplies Expense Interest Expense Depreciation Expense-Building Depreciation Expense-Equipment Total 40,700 2,000 3,500 1,800 21,000 45,000 3,200 56,000 1,200 16,200 1,400 2,000 1,200 2,600 $ 202,100 $ 202,100