I have this exercise and i dont know how to do it

DDB Corporation was formed by twenty-four shareholders on January 1, 2017. The shareholders will be having their semi-annual meeting on September 28, 2018 to review the financial results for January 1 June 30, 2018. As of January 1, 2018, the company has a retained deficit (this means the company incurred a net loss in 2017).

The following are the unadjusted balances of DDB Corporation as of June 30, 2018. Although the accounts are all shown with a positive balance, with the exception of retained earnings, they have the normal debit or credit balance that accounts in their account type have (e.g. assets have a debit balance, liabilities have a credit balance).

Accounts payable 95,000

Accounts receivable 75,000

Accumulated depreciation 28,000

Additional paid-in capital 15,000

Cash 56,960

Common stock 12,000

Depreciation expense 8,000

Rent expense 14,000

Income tax expense 22,736

Income tax payable 22,736a.

Interest expense 1,000

Interest payable 1,000

Inventory 16,000

Cost of goods sold 87,540

Note payable - current portion 10,000

Note payable - long-term 50,000

Payroll taxes payable 6,000

Prepaid expenses 5,000

Property, plant, & equipment 100,000

Retained deficit 35,000

Product revenue 330,000

Deferred revenue 6,000

Advertising expense 61,000

Salary expense 93,500

You have been hired by DDB Corporation to prepare the financial statements. The company has provided you with the following information necessary to record adjustments required to show accurate financial statements.

1. On June 27, 2018, the bookkeeper received $20,000 for a shipment to be sent on July 8, 2018. The bookkeeper debited Cash and credited Product Revenue on June 27.

2. The company performed a physical inventory count on June 30, 2018 and determined that the inventory value on hand was $25,000.

3. The unadjusted balance in the Prepaid Expense account includes prepayment on an advertising contract. The balance in Prepaid Expenses as June 30, 2018 should include:

1. Advertising - January 1 - December 31, 2018 annual contract, original contract amount was $60,000.
2. Rent - July 2018 payment of $2,000. When the bookkeeper paid this on June 29th, he debited Rent Expense and credited Cash.

4. Depreciation expense for the 6 months ended June 30, 2018 should be $10,000.

5. On January 1, 2018, the company borrowed $60,000 at a 5% annual rate. The loan is to be paid back to the bank annually on December 31st in three equal installments beginning December 31, 2018. Each payment will include the interest incurred for that year. The interest for the year should be expensed evenly throughout the year. (Hint: there are two adjustments to be made)

6. Income tax expense must be re-calculated after all adjustments have been recorded. The income tax rate is 35%.

Requirements:

(1) Show trial balance spreadsheet. Reference each adjustments with the letter used above.

(2) show properly formatted income statement and balance sheet based on the adjusted balances from your trial balance spreadsheet. List each account separately in your statements (for example, do not have one amount on your income statement labeled "operating expenses"). . Per share information is not given so you do not need to include earnings per share on your income statement.

(3) Calculate the net profit margin and current ratio for the financial statements.

(4) Show memo to the shareholders reporting the company's financial results for the six months ended June 30, 2018. Include a brief explanation of your ratio analysis results from requirement (3). Also, the company is considering the purchase of a $75,000 piece of equipment. One plan to acquire the equipment calls for a $50,000 cash payment with the remainder financed on a six-month loan. Assuming all account balances other than those accounts affect by the equipment purchase remain the same, include an explanation of the effect of this financing arrangement on the company's current ratio. Ignore interest expense on the new loan.