Les Waruck, Kim Chau, and Leena Manta formed a partnership, WCM Sales, on January 11, 2023, by investing $68,250, $109,200, and $95,550, respectively. The partnership agreement states that profits and losses are to be shared on the basis of a salary allowance of $40,000 for Waruck, $80,000 for Chau, and $40,000 for Manta, with any remainder shared on the ratio of beginning-of-period capital balance. Following is the December 31, 2023, adjusted trial balance, in alphabetical order:

*Assume all accounts have a normal balance.**$7,000 is due during 2024.

RequiredPrepare the December 31, 2023, classified balance sheet, showing all appropriate supporting calculations.

Analysis Component:Assuming that the assets of businesses similar to WCM Sales are financed 60% by debt and 40% by equity, does WCM Sales compare favourably or unfavourably to the industry average? What is the relationship between type of financing and risk?

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Account Balance* Accounts payable............ 14,000 Accounts receivable................ 46,000 Accumulated amortization, paten.….............. 6,000 Accumulated depreciation, fixtures............. 3,000 Accumulated depreciation, furniture............. 6,000 Allowance for doubtful accounts................ 1,200 Amortization expense, patent...... 2,000 Bad debt expense.... 2,800 Cash...... 14,000 3,000 6,000 Sales discounts.. 31,000 Unearned sales... 69,000 Wages expense.. 109,200 14,000 Depreciation expense, fixtures.......…......... Depreciation expense, furniture.. Fixtures........... Furniture....... Kim Chau, capital... Kim Chau, withdrawals... Account Balance* Leena Manta, capital....... 95,550 Leena Manta, withdrawals.................. 10,000 Les Waruck, capital.............. 68,250 30,000 Les Waruck, withdrawals................. Merchandise inventory........... Notes payable, due 2026**. 22,000 34,000 Patent 20,000 Prepaid rent.... 36,000 Rent expense.. 84,000 Sales............. 102,000 3,400 3,000 49,000