Question
These items are taken from the accounting records of Entity A at its December 31, 2022 year end. Accounts payable - $834 Accounts receivable- 810
These items are taken from the accounting records of Entity A at its December 31, 2022 year end.
Accounts payable - $834
Accounts receivable- 810
Accumulated depreciation - building - 670
Building - 2,420
Cash - 1,270
Common Stock - 16,900
Copyright - 1,800
Depreciation expense - 335
Dividends - 325
Income tax expense - 165
Income tax payable - 135
Insurance expense - 210
Interest expense - 400
Inventory - 967
Investment in land - 14,200
Land - 3,100
Marketable securities (short-term) - 1,200
Mortgage payable (due 2032) - 3,500
Note payable (due 2023) - 61
Prepaid insurance -60
Retained Earnings (beginning) - 1,600
Salaries and wages expense 1,060
Salaries and wages payable - 222
Service revenue - 5,100
Supplies expense - 700
Instructions - In good form (including headings), prepare an income statement, a retained earnings statement, and a classified balance sheet as of December 31, 2022. Then compute the current ratio and the debt-to-total-assets ratios identifying which is a measure of liquidity and which is a measure of solvency.
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