The adjusted trial balance of Coastal Creations at June 30, 2023, 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, 2023, and the classified balance sheet on that date. Use the account format for the balance sheet. Report expenses from largest to smallest amount.

2. Journalize the closing entries.

3. Compute Coastal Creations’ current ratio and debt ratio at June 30, 2023. One year ago the current ratio stood at 1.81 and the debt ratio was 0.71. Did Coastal Creations’ ability to pay debts improve or deteriorate during the fiscal year?

Transcribed Image Text:

Cash Accounts receivable Supplies Prepaid insurance COASTAL CREATIONS Adjusted Trial Balance June 30, 2023 Equipment Accumulated amortization-equipment Building Accumulated amortization-building Land Accounts payable Interest payable Salaries payable Unearned service revenue Note payable, long-term A. Kapoor, capital A. Kapoor, withdrawals Service revenue Amortization expense-equipment Amortization expense-building Salaries expense Insurance expense Interest expense Utilities expense Supplies expense Total $ 12,610 15,882 18,774 1,920 33,480 68,940 18,000 28,180 4,380 2,382 13,882 1,860 7,906 2,580 2,148 $232,924 $ 9,888 10,110 25,040 1,894 1,462 1,380 58,200 41,034 83,916 $232,924