Refer to Exercise 3-36B. The unadjusted trial balance and income statement amounts from the December 31 adjusted trial balance of Terrell Production Company follow:

Requirements
1. Use the data in the partial worksheet to prepare Terrell Production Company’s classified balance sheet at December 31 of the current year. Use the report format. First you must compute the adjusted balance for several of the balance-sheet accounts.
2. Compute Terrell Production Company’s net working capital, current ratio, and debt ratio at December 31. A year ago, the net working capital was $7,000, the current ratio was 1.72, and the debt ratio was 0.40. Indicate whether the company’s ability to pay its debts—both current and total—improved or deteriorated during the currentyear.

Transcribed Image Text:

A1 Terrel Production Company Unadjusted Trial Balance From the Adjusted Trial Balance Account 2 Cash 14450 2500 44,000 Prepaid rent 5 Equipment Accumulated depreclation, equipment Accounts payable 3,500 4,700 8 Salary payable 10 Income tax payable 12 Common stock 1 Divldends Unearned service revenue Notes payable, long-term Retained earnings 9,100 17,000 8,700 11,160 1,10.60 20,600 Service revenue Salary expense Rent expense 14,100 4,600 1600 5,600 2,300 750 18 Depreciation expense 19 Income tax expense 2 Total 20,600