Requirement 1. Use the data in the partial worksheet to prepare Winwood Production Company's classified balance sheet at December 31 of the current year. Use the report format. First you must calculate the adjusted balance for several of the balance-sheet accounts. Let's prepare the balance sheet for Winwood Production Company.

Requirement 2. Calculate Winwood Production Company's net working capital, current ratio, and debt ratio at December 31. A year ago, net working capital was $7,860, the current ratio was 1.961.96, and the debt ratio was 0.280.28. Indicate whether the company's ability to pay its Debts both current and total improved or deteriorated during the current year.

Winwood Production Company Account Unadjusted Trial Balance Adjustments Trial Balance Account Unadjusted Trial Balance Adjustments Trial Balance Cash 15,060 Prepaid rent 1,700 Equipment 41,000 Accumulated depreciationequipment 3,100 Accounts payable 4,000 Salary payable Unearned service revenue 9,200 Income tax payable Notes payable, long-term 17,000 Common stock 8,100 Retained earnings 9,560 Dividends 1,400 Service revenue 13,500 19,900 Salary expense 4,300 4,900 Rent expense 1,000 1,600 Depreciation Expenseequipment 400 Income tax expense 1,000 Total $64,460 64,460 $7,900 $19,900

Journal Entry Date Accounts Debit Credit Dec 31 Unearned Service Revenue 6,400 Service Revenue 6,400 Dec 31 Salary Expense 600 Salary Payable 600 Dec 31 Rent Expense 600 Prepaid Rent 600 Dec 31 Depreciation Expense 400 Accumulated DepreciationEquipment 400 Dec 31 Income Tax Expense 1,000 Income Tax Payable 1,000