The adjusted trial balance for Sharp Construction as of December 31, 2011, follows.

J. Sharp invested $50,000 cash in the business during year 2011 (the December 31, 2010, credit balance of the J. Sharp, Capital account was $32,700). Sharp Construction is required to make a $6,600 payment on its long-term notes payable during 2012.

Required
1. Prepare the income statement and the statement of owner’s equity for the calendar year 2011 and the classified balance sheet at December 31, 2011.
2. Prepare the necessary closing entries at December 31, 2011.
3. Use the information in the financial statements to compute these ratios:
(a) Return on assets (total assets at December 31, 2010, was $200,000),
(b) Debt ratio,
(c) Profit margin ratio (use total revenues as the denominator), and
(d) Currentratio.

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SHARP CONSTRUCTION Adjusted Trial Balance Account Title Credit 0 Cash 104 Short-term investments 26 Supplies .. 4,000 6,000 39.000 167 Equipment. . . 168 Accumulated depreciation Equipment 173 Building 174 Accumulated depreciation- Building .. 183 Land. 201 Accounts payable .. 203 Interest payable 208 Rent payable 210 Wages payable. 213 Property taxes payable $ 20,000 130,000 55,000 45,000 5.500 1,500 1,500 251 Long-term notes payable.. 30 Sharp. Capital . . 302 . Sharp. Withdrawals 66.000 82,700 12,000 96,000 13,000 1.900 ,000 406 Rent earned ...*.. 407 Dividends earned 606 Depreciation expense-Building.... 612 Depreciation expense-Equipment 623 Wages expense 633 Interest expense 637 Insurance expense... 640 Rent e 652 Supplies expense 682 Postage expense. 683 Property taxes expense. 684 Repairs expense.... 0,000 5.000 31,000 4,100 9,000 12.400 6.400 3,200 4,000 7.900 3.600 Totals $363.900 $363.900