The following is an alphabetical listing of Stone Boat Company's balance sheet accounts and account balances on December 31, 2016:

A.P	$44,200	Income Taxes Payable	$19700
A/R	37100	inventory	85300
Accumulated Depreciation	109300	Investment in Affiliate	30,000
additional paid in capital on Common Stock	20,000	Long-Term Liabilities (book value)	91,000
Additional Pd-in capital on Preferred Stock	3200	Misc.Current Payable	6800
allowance for doubful accounts	1600	notes receivable	17000
bond sinking fund	12500	preferred stock	32000
cash	13800	Property, plant and Equipment	296700
Common stock	80000	R.E	84600

Additional Information:

1. The company reports on the balance sheet the net book value of property and eeuipment and long-term liabilities. the related details are disclosed in the notes.

2. The straight-line method is used to depreciate property and equipment based upton cost, estimated residual values, and estimated life. The costs of the assets in this account are: land, $29,500; buildings, $164,600; store fixtures, $72,600; and office equipment, $30,000.

3. The accumulated depreciation breakdown is as follows: bildings, $54,600; store fixtures, $37,400; office equipment, $17,300.

4. The long-term debt includes 12%, $36,000 face value bonds that mature on December 31, 2021, and have an unamortized bond discount of $1,000; 11%, $48,000 face value bonds that mature on December 21,2022, have a premium on bonds payable of $1,800, and whose retirement is being funded by a bond sinking fund; and a 13% note payable that has a face value of $6,200 and matures on January 1, 2019.

5. The non-interest-bearing note receivable matures on June 1, 2020.

6. Inventory is listed at lower of cost or market; cost is determined on the basis of average cost.

7. The investment in affilate is carried at cost. The company has guaranteed the interst on 12%, $50,000, 15-year bonds issued by this affilate, Jay company.

8. Commont stock has a $10 par value per share, 10,000 shares are authorized and 1,000 shares were issued during 2016 at a price of $13 per share, resulting in 8000 shares issued at year-end.

9. Preferred stock has a $50 par value per share, 2000 shares are authorized, and 140 shares were issued during 2016 at a price of $55 per share, resulting in 640 shares issued at year-end.

10. On January 15, 2017, before the December 31,2016, balance sheet was issed, a building with a cost of $20,000 and a book value of $7,000. was totally destoyed. Insurance proceeds will amount to only $5,000.

11. Net income and dividentds declared and paid during the year were $50,500 and $21,000, respectively.

REQUIRED:

1. Prepare Stone Boat's December 31,2016, balance sheet (including appropriate parenthetical notations).

2. Prepare a stement of shreholder's equity for 2016.

3. Prepare notes that itemize the balance sheet control accounts and those necessary to disclose any company accounting policies, contingent liabilities, and subsequent events.

4. Compute the debt-to assets ratio at the end of 2016. What is your evaluation of this ratio if it was 39% at the end of 2015?