The accounting records of Tama Co. show the following assets and liabilities as of December 31, 2016 and 2017.

Required
1. Prepare balance sheets for the business as of December 31, 2016 and 2017.
2. Compute net income for 2017 by comparing total equity amounts for these two years and using the following information: During 2017, the owner invested $5,000 additional cash in the business and withdrew $3,000 cash for personal use.
3. Compute the December 31, 2017, debt ratio (in percent and rounded to one decimal).

Transcribed Image Text:

December 31 2016 2017 $30,000 S 5,000 35,000 25,000 000 3500 0,000 40,000 28,000 28,500 0 250,000 0 50,000 4,000 12,000 0 250,000 Accounts recelvable Office supples Office equipment Machlnery Land Accounts payable