Problem $3$ Ratio$$s

Pearl Corporation has the following list of accounts and balances after posting its closing entries:

Pearl Corporation

Trial Balance

December $31,2023$

Debit Credit

Cash $$24,500$

Accounts receivable $5,400$

Supplies $850$

Prepaid insurance $2,100$

Building $40,500$

Accumulated depreciation$-$building $$7,500$

Equipment $22,300$

Accumulated depreciation$-$equipment $3,400$

Accounts payable $6,500$

Unearned service revenue $8,400$

Salary payable $900$

Common shares $50,200$

Retained earnings $\_\_\_\_\_\_18,750$

$$95,650$ $$95,650$

Required

Calculate the current ratio and the debt ratio. Assume the unearned service revenue will be earned within six months. Round to two decimals.

Assume on December $31,2023,$ Pearl Corporation borrows $$50,000$ from the First Street Bank and issues a $6\%,6-$month note. Recalculate the current ratio and the debt ratio. Round to two decimals.