The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2017 and 2018.

Required

1. Prepare balance sheets for the business as of December 31, 2017 and 2018. (Hint: Report only total equity on the balance sheet and remember that total equity equals the difference between assets and liabilities.)

2. Compute net income for 2018 by comparing total equity amounts for these two years and using the following information: During 2018, the owner invested $35,000 additional cash in the business (in exchange for common stock) and the company paid $19,000 cash in dividends.

3. Compute the 2018 year-end debt ratio (in percent and rounded to one decimal).

Transcribed Image Text:

December 31 2017 2018 $ 64,300 $ 15,640 Cash 26,240 19,100 Accounts receivable.... Office supplies .... Office equipment Trucks .... Building. 1,960 3,160 44,000 44,000 148,000 157,000 .... 80,000 60,000 Land .... Accounts payable.. Note payable 3,500 33,500 40,000