The adjusted trial balance of Simpson Lid, at October 31, 2017, follows. (Click the loon to view the adjusted trial balance.) Requlements 1. Prepare Simpson Lid.'s 2017 income statement, statement of retained earnings, and balance sheet. List expenses (except for income tax) in decreasing order on the income statement and show total liabilities on the balance sheet 2. Simpson Lad's lenders require that the company maintain a debt ratio no higher than 0.50. Compute Simpson Ltd.'s debt ratio at October 31, 2017, to determina whether the company is in compliance with this debt restriction. If not, suggest a way that Simpson Ltd. could have avoided this difficult situation aide Requirement 1. Prepare Simpson Ltd.'s 2017 income statement, statement of retained earnings, and balance sheet. List expenses (except for income tax) in decreasing order on the income statement and show total liabilities on the balance sheet. Begin by preparing Simpson Ltd.'s 2017 income statement Adjusted trial balance Simpson Ltd. Adjusted Trial Balance October 31, 2017 Account Debit Credit Cash 1,400 8,800 2.600 1,400 Accounts receivable Supplies Prepaid rent Equipment Accumulated depreciation Accounts payable Interest payable Unearned service revenue 37,100 $ 4,000 3,600 700 Income tax payable 400 2.200 18.700 4.900 950 Note payable Share capital Retained earnings Dividends Service revenue Depreciation expense 22.000 106,850 1.300 Print Done 0 Adjusted trial balance 1,400 37,100 $ 4,000 3,600 700 400 2,200 18,700 Prepaid rent Equipment Accumulated depreciation Accounts payable Interest payable Unearned service revenue Income tax payable Note payable Share capital Retained earnings Dividends Service revenue Depreciation expense Salary expense Rent expense Interest expense Insurance expense Supplies expense 4,900 950 22,000 106,850 1,300 39,900 10,800 3,000 4,200 2,400 7,400 Income tax expense Total 142,300 $ 142,300 Print Done