The adjusted trial balance of NotE Design at December 31, 2023, the end of the company’s fiscal year, is shown below.

Required

1. Prepare NotE Design’s income statement and statement of owner’s equity for the year ended December 31, 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. Include explanations.

3. Compute NotE Design’s current ratio and debt ratio at December 31, 2023. One year ago, the current ratio stood at 1.21, and the debt ratio was 0.55. Did NotE Design’s ability to pay debts improve or deteriorate during fiscal 2023?

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Cash Accounts receivable Supplies Prepaid insurance NOTE DESIGN Adjusted Trial Balance April 30, 2023 Equipment Accumulated amortization-equipment Building Accumulated amortization-building Land Accounts payable Interest payable Salaries payable Unearned revenue Note payable, long-term L. Ramsey, capital L. Ramsey, withdrawals Service revenue Amortization expense-equipment Amortization expense-building Salaries expense Insurance expense Interest expense Utilities expense Supplies expense Total $ 3,740 87,480 7,380 4,580 127,860 148,660 40,000 56,000 13,800 7,420 66,620 10,740 17,340 9,940 13,760 $615,320 $ 56,860 36,520 41,100 5,560 2,660 7,320 139,800 128,400 197,100 $615,320