The accounts for End-in-Sight, Inc. as of Dec. 31, 2016, Inc. are shown below:

Cash

 25,000

A/R

  14,700

Allow. For Bad Debts

     600

Inventory

 30,700

Long-Term Investments

15,000

Equipment

100,000

Accum. Dep. - Equip.

 11,500

A/P

  4,300

 LT Note Payable

70,000

Capital Stock, $10 par

40,000

Treasury Stock

 2,000

Retained Earnings (deficit)

 15,550

Sales

322,000

Sales Returns

  7,500

Sales Discounts

 4,500

Cost of Goods Sold

192,250

Selling Expenses

 25,000

Office Supplies Expense

  6,000

Insurance Expense

 3,000

Taxes - Real Estate and Payroll

 5,200

Interest Revenue

 1,200

Miscellaneous Expense

 3,200

Additional information for other 2016 adjusting entries:

a) ABC uses a perpetual inventory system

b) An analysis of A/R reveals that the appropriate year-end balance in Allowance    for Bad Debts is $800

c) Equipment is depreciated at 10% per year, no depreciation has been recorded for 2016 to date.

d) A recheck of the inventory count revealed that goods costing $5,600 were excluded from ending inventory; and a book to physical adjustment was NOT made. The goods in question were shipped on January 3, 2017. A related receivable for $8,200 was also mistakenly recorded in 2016.

e) 2016 interest on the note payable has not been accrued. The 5 year note was issued on March 1, 2016, and has a simple interest rate of 12%. Principal and interest are due upon maturity.

f) The balance in Insurance Expense represents $3,000 that was paid for a 1-year policy on October 1. The policy went into effect on October 1.

g) Property taxes for 2016 of $2,000 are due January 31, 2017.

h) Salaries to be accrued at year-end are $500.

i) Office supplies on hand at year-end are $200.

j) Dividends totaling $5,800 were declared on December 25. The dividends will not be paid until January 15, 2017. No entry was made.

k) Accrued interest on long-term investments is $240.

l) Income taxes are estimated to be 20% of the income before income taxes.

m) There are 50,000 shares authorized.

Add accounts as necessary.

1) Prepare trial balance (7 points)

2) Complete the adjusting entries for 2016. (18 points)

3) Prepare multi-step income statement, statement of retained earnings and classified balance sheet for 2016. (19 points)

 4) Journalize the closing entries.(6 points)

5) Calculate the current ratio and comment on the strength/weakness of this ratio.