The accounting records of Tama Co. show the following assets and liabilities as of December 31, 2015 and 2016.

During 2016, Joe Tama, the owner, invested $15,000 additional cash in the business (in exchange for more common stock). Late in December 2016, the business purchased a small building and land valued at $300,000. This purchase required $50,000 cash plus a $250,000 note payable. Also, the business pays $250 cash per month for dividends.
Required
1. Prepare balance sheets for the business as of December 31, 2015 and 2016.
2. By comparing equity amounts from the balance sheets and using the additional information from the problem, compute the net income earned by the business in 2016.
3. Compute the December 31, 2016, debt ratio (in percent and rounded to one decimal).

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December 31 2015 2016 $20,000 5,000 35,000 25,000 13,500 40,000 . 28,500 28,500 0 250,000 0 50,000 2,000 0 250,000 Cash. Accounts receivable Office supplies Office equipment 8,000 40,000 Building Land... Accounts payable Note payable 4,000