These items are taken from the accounting records of Entity Z at its December 31, 2023 year end.

Accounts payable ................................................................................... $3,450

Accounts receivable ............................................................................... 7,320

Building ................................................................................................. 71,800

Accumulated depreciationbuilding..................................................... 21,000

Depreciation expense ............................................................................. 6,000

Cash 4,080

Common stock ....................................................................................... 40,000

Dividends ............................................................................................... 36,000

Sales revenue ......................................................................................... 99,650

Income tax expense ................................................................................ 10,000

Income taxes payable ............................................................................. 8,000

Insurance expense .................................................................................. 3,784

Land (on which the building sits) ......................................................... 41,850

Note payable (due in 2028) .................................................................... 2,000

Patent ..................................................................................................... 9,000

Prepaid insurance .................................................................................. 1,188

Retained earnings, beginning ................................................................. 53,070

Salaries and wages expense ................................................................... 23,850

Salaries and wages payable ................................................................... 1,650

Supplies ................................................................................................. 228

Supplies expense .................................................................................... 1,320

Tesla common stock (long-term investment) 11,000

Utility expense ....................................................................................... 1,400

Instructions

In good form (include headings), prepare an income statement, a retained earnings statement, and a classified balance sheet as of December 31, 2023. 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. Don't forget this last part. Check figures:

Retained earnings, December 31, 2023 $70,366; Total assets, $125,466