The adjusted trial balance of Reid and Campbell Ltd. at December 31, 2017, appears below.

Requirements
1. Prepare Reid and Campbell Ltd.'s 2017 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, 2017, 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, 2017 2 Cash 3 Accounts receivable 4 5 Store furnishings 6 Accumulated de 7 Accounts payable $ 11,600 41,400 1,300 67,600 aid rent $ 12,900 3,600 4,500 2,100 900 8,800 26,200 12,000 20,300 ation 9 Interest 10 Sala 11 Income tax payable 12 Note payable 13 Share capital 14 Retained earnings, Dec. 31, 2016 15 Dividends 16 Sales 17 Depreciation expense 18 19 Rent expense 20 Interest expense 21 Income tax expense 22 Total 23 able 48,000 165,900 11,300 44,000 12,000 1,200 18,800 expense 257,200 257,200