Prepare Nova Scotia ?Design's income statement and statement of? owner's equity for the year ended December 31?, 2023?, and the classified balance sheet on that date. Use the account format for the balance sheet. 2. Journalize the closing entries. Include explanations. 3. Compute Nova Scotia ?Design's current ratio and debt ratio at December 31?, 2023. One year? ago, the current ratio stood at 1.21 and the debt ratio was 0.52. Did Nova Scotia ?Design's ability to pay debts improve or deteriorate during fiscal 2023??

 

Account	Debit	Credit
Cash	3,840
Accounts receivable	87,540
Supplies	8,700
Prepaid insurance	4,900
Equipment	135,000
Accumulated amortization—equipment		56,900
Building	154,000
Accumulated amortization—building		36,620
Land	42,000
Accounts payable		41,700
Interest payable		5,900
Wages payable		2,640
Unearned service revenue		8,100
Note payable, long-term		142,600
L. Nelson, capital		174,480
L. Nelson, withdrawals	68,000
Service revenue		213,000
Amortization expense—equipment	14,400
Amortization expense—building	7,400
Wages expense	80,000
Insurance expense	16,000
Interest expense	35,000
Utilities expense	11,300
Supplies expense	13,860
Total	681,940	681,940