Question: Preparing financial statements including a classified balance sheet in report form, preparing closing entries, and using the current ratio to evaluate a company The adjusted trial balance of Blume Irrigation System at December 31, 2016, follows:
Requirements: 1. Prepare the company's income statement for the year ended December 31, 2016.
2. Prepare the company's statement of retained earnings for the year ended December 31, 2016.
3. Prepare the company's classified balance sheet in report form at December 31, 2016.
4. Journalize the closing entries for Blume Irrigation System.
5. Compute the company's current ratio at December 31, 2016. At December 31, 2015, the current ratio was 1.8. Did the company's ability to pay current debts improve or deteriorate, or did it remain the same?