Question: The adjusted trial balance for Sharp Construction as of December 31, 2011, follows.
J. Sharp invested $50,000 cash in the business during year 2011 (the December 31, 2010, credit balance of the J. Sharp, Capital account was $32,700). Sharp Construction is required to make a $6,600 payment on its long-term notes payable during 2012.
Required: 1. Prepare the income statement and the statement of owner's equity for the calendar year 2011 and the classified balance sheet at December 31, 2011.
2. Prepare the necessary closing entries at December 31, 2011.
3. Use the information in the financial statements to compute these ratios:
(a) return on assets (total assets at December 31, 2010, was $200,000),
(b) debt ratio,
(c) profit margin ratio (use total revenues as the denominator), and
(d) current ratio.