The adjusted trial balance of Reid and Campbell Ltd. at December 31, 2014, appears below.

Requirements
1. Prepare Reid and Campbell Ltd.'s 2014 income statement, statement of retained earnings, and balance sheet. List expenses in decreasing order on the income statement and show total liabilities on the balance sheet. Draw arrows linking the three financial statements.
2. Compute Reid and Campbell Ltd.'s debt ratio at December 31, 2014, rounding to two decimal places. Evaluate the company's debt ratio as strong or weak.

Transcribed Image Text:

Reid and Campbell Ltd Adjusted Trial Balance December 31, 2014 Cash 41,400 1,300 67,600 Prepaid rent. Store furnishings Accumulated depreciation. Accounts payable... Deposits Interest payable Salary payable. Income tax payable. Note payable Share capital Retained earnings, Dec. 31, 201 Dividends Sales... $ 12,900 3,600 4,500 2,100 8,800 26,200 12,000 20,300 48,000 165,900 11,300 Salary expense Rent expense.. 12,000 1 ,200 18,800 Income tax expense Total $257,200 $257,200