Problem 2-5A Computing net income from equity analysis, preparing a balance sheet, and computing the debt The accounting records of Nettle Distribution show the following assets and liabilities as of December 31 for Year 1 and Year 2. Required 1. Prepare balance sheets for the business as of December 31 for Year 1 and for Year 2. 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 Year 2 by comparing total equity amounts for these two years and using the following information: During Year 2, the owner invested $35,000 additional cash in the business in exchange for common stock, and the company paid a $19,000 cash dividend. Check (2) Net income, $6,000 3. Compute the Year 2 year-end debt ratio