The adjusted trial balance of Balti Design at June 30, 2014, the end of the company's fiscal year, appears below.
Required
1. Prepare the income statement and statement of owner's equity for the year ended June 30, 2014, and the classified balance sheet on that date. Use the account format for the balance sheet.
2. Journalize the closing entries.
3. Compute Balti Design's current ratio and debt ratio at June 30, 2014. One year ago, the current ratio stood at 1.01, and the debt ratio was 0.71. Did Balti Design's ability to pay debts improve or deteriorate during the fiscal year?

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BALTI DESIGN Adjusted Trial Balance June 30, 2014 $ 12,610 Cash Accounts receivable 15,882 18,774 Supplies Prepaid insurance Equipment Accumulated amortization-equipment Building Accumulated amortization-building 1,920 33,480 $9,888 68,940 10,110 Land 18,000 Accounts payable Interest payable Wages payable Unearned service revenue 25,040 1,894 1,462 1,380 58,200 Notes payable, long-term А. Кароог, сapital A. Kapoor, withdrawals 41,034 28,180 Service revenue 83,916 Amortization expense Amortization expense Wages expense Insurance expense 4,380 2,382 equipment building 13,882 1,860 7,906 2,580 2,148 $232,924 Interest expense Utilities expense Supplies expense Total $232,924