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MNO Corp. reports the following balances on February 28, 2025: Account Amount Cash $21,000 Accounts Receivable $13,000 Inventory $24,000 Prepaid Insurance $2,900 Machinery $55,000 Accumulated

MNO Corp. reports the following balances on February 28, 2025:

Account

Amount

Cash

$21,000

Accounts Receivable

$13,000

Inventory

$24,000

Prepaid Insurance

$2,900

Machinery

$55,000

Accumulated Depreciation

$11,000

Accounts Payable

$17,000

Short-Term Loans

$6,000

Bonds Payable

$22,000

Common Stock

$45,000

Retained Earnings

$14,900

Requirements:

  1. Draft a balance sheet with current and non-current classifications.
  2. Calculate the quick ratio and debt-to-equity ratio.
  3. Analyze the financial leverage and liquidity of MNO Corp.
  4. Prepare adjusting entries for:
    • Depreciation expense: $5,500
    • Insurance expense: $1,450
  5. Explain the impact of not making adjusting entries on the balance sheet and income statement.

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