Prepare Griffith Corporation's 2018 single-step income statement, statement of retained earnings, and balance sheet.

2. Griffith's lenders require that the company maintain a debt ratio no higher than 0.50. Calculate 's debt ratio at October 31, 2018, to determine whether the company is in compliance with this debt restriction. If not, suggest a way that Griffith could have avoided this difficult situation.

Griffith Corporation Adjusted Trial Balance October 31, 2018 Account Debit Credit Cash 12,400 Accounts receivable 18,600 2,100 Supplies Prepaid rent Equipment Accumulated depreciation-equipment Accounts payable 2,100 37,400 $ 4,700 8,800 Interest payable 1,000 Unearned service revenue 800 2,300 Income tax payable Note payable 19,100 Common stock 19,000 Retained earnings 2,500 Dividends 10,000 Service revenue 92,400 Depreciation expense-equipment 1,800 Salary expense 40,300 Rent expense 10,700 Interest expense 2,500 Insurance expense 3,800 Supplies expense 2,000 6,900 Income tax expense 150,600 $ 150,600 Total Griffith Corporation Income Statement Year Ended October 31, 2018 Income before tax