P7-4B The adjusted trial balance of Gabelli Equipment, Inc., as

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P7-4B The adjusted trial balance of Gabelli Equipment, Inc., as of June 30, 2008 (its year-end) contains the following information.

Accounts payable $ 486,000
Accounts receivable 420,000
Accumulated depreciation—Buildings 180,000
Accumulated depreciation—Equipment 577,500
Bonds payable 1,750,000
Buildings—Manufacturing plant and offices 680,000
Cash 87,000
Common stock 500,000
Equipment 1,650,000
Income taxes payable 47,000
Interest payable 70,000
Interest receivable 21,000
Inventories 845,000
Investment in Spartan, Inc. bonds (held-to-maturity—long-term) 600,000
Land 212,000
Mortgage payable (on manufacturing plant—long-term) 310,000
Notes payable (short-term) 210,000
Prepaid advertising 9,500
Prepaid insurance 21,000
Retained earnings (June 30, 2008) 447,000
Supplies 32,000

Instructions
(a) Prepare in good form a classified balance sheet for Gabelli Equipment.

(b) Calculate the following balance sheet relationships: current ratio, debt to total assets ratio, and working capital.

(c) Assume that Gabelli has come to you, as vice president of Illinois National Bank, seeking a $450,000 loan to help defray the costs of upgrading some of its machinery.Would you be willing to approve the loan? Is there any additional information you would like to have before making your decision?