The adjusted trial balance for the year of Smith Corporation at May 31, 2018, follows. (Click the icon to view the adjusted trial balance.) Read the requirements. Requirement. riepare a corporation 5 2U TO Smgie-step come statemen, statement orrelameu carrimys, and balance sheet. Begin by preparing Smith's 2018 income statement. Smith Corporation Income Statement Year Ended May 31, 2018 Income before tax mull Smith Corporation Adjusted Trial Balance May 31, 2018 Account Debit Credit Cash $ 17,000 Accounts receivable 18,700 2,400 Supplies Prepaid rent 1,400 36,900 Equipment Accumulated depreciation equipment $ 4,500 Accounts payable 8,900 Interest payable 200 1,000 Unearned service revenue Income tax payable 2,500 Note payable 19,100 Common stock 17,000 Retained earnings 5,000 Dividends 10,000 Service revenue 95,000 Service revenue 95,000 Depreciation expense equipment 1,100 Salary expense 39,500 Rent expense 10,200 Interest expense 3,100 Insurance expense 3,700 Supplies expense 2,500 6,700 Income tax expense $ 153,200 $ 153,200 Total Requirements 1. Prepare Smith Corporation's 2018 single-step income statement, statement of retained earnings, and balance sheet. 2. Smith's lenders require that the company maintain a debt ratio no higher than 0.50. Calculate Smith's debt ratio at May 31, 2018, to determine whether the company is in compliance with this debt restriction. If not, suggest a way that Smith could have avoided this difficult situation