Comprehensive Practice problem for Chapter 4 On August 1, 2022, Longhorn Corp. reported the following balances concerning its merchandise related accounts: When recording dates for journal entries, remember that inventory purchases/sales are not recorded until trrancfor of titlo 1. Record the journal entries necessary to reflect the merchandise transactions during August. 2. Determine the ending balance of the inventory, accounts receivable, and accounts payable accounts on 8/30. 3. Use the following adjusted trial balance and your work above to create an income statement, statement of retained earnings and balance sheet for the period ending August 30, 2022. Questions 4 \& 5 are a Bonus opportunity ( 5 points possible) 4. Using the financial statements created in 3, calculate ratios to assess the company's liquidity risk, solvency risk and capital structure as well as their gross profit percentage. In providing your judgement of the company's adequacy in these risks, assume that industry competitors report a median total liabilities to total equity ratio of 1.5, a median total assets to total liabilities ratio of 1.9 and a median current ratio of 2.5. The industry median gross profit ratio is 0.57. What adjustment could the company make to increase its comparability with industry ratios. 5. Prepare closing entries for the month of August. Comprehensive Practice problem for Chapter 4 On August 1, 2022, Longhorn Corp. reported the following balances concerning its merchandise related accounts: When recording dates for journal entries, remember that inventory purchases/sales are not recorded until trrancfor of titlo 1. Record the journal entries necessary to reflect the merchandise transactions during August. 2. Determine the ending balance of the inventory, accounts receivable, and accounts payable accounts on 8/30. 3. Use the following adjusted trial balance and your work above to create an income statement, statement of retained earnings and balance sheet for the period ending August 30, 2022. Questions 4 \& 5 are a Bonus opportunity ( 5 points possible) 4. Using the financial statements created in 3, calculate ratios to assess the company's liquidity risk, solvency risk and capital structure as well as their gross profit percentage. In providing your judgement of the company's adequacy in these risks, assume that industry competitors report a median total liabilities to total equity ratio of 1.5, a median total assets to total liabilities ratio of 1.9 and a median current ratio of 2.5. The industry median gross profit ratio is 0.57. What adjustment could the company make to increase its comparability with industry ratios. 5. Prepare closing entries for the month of August