The following information applies to the questions displayed below.]

The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2014 and 2015.

December 31		2014		2015
Cash	$	53,922	$	10,324
Accounts receivable		29,270		22,947
Office supplies		4,617		3,382
Office equipment		141,731		150,970
Trucks		55,460		64,460
Building		0		184,884
Land		0		46,137
Accounts payable		76,950		38,165
Note payable		0		131,021

Late in December 2015, the business purchased a small office building and land for $231,021. It paid $100,000 cash toward the purchase and a $131,021 note payable was signed for the balance. Mr. Nettle had to invest $33,000 cash in the business (in exchange for common stock) to enable it to pay the $100,000 cash. The business also pays $3,500 cash per month for dividends.

Required:

1.

Prepare balance sheets for the business as of December 31, 2014 and 2015. (Hint: Report only total equity on the balance sheet and remember that total equity equals the difference between assets and liabilities.)

2.

By comparing equity amounts from the balance sheets and using the additional information presented in this problem, prepare a calculation to show how much net income was earned by the business during 2015.

3.	Compute the 2015 year-end debt ratio for the business.