Selected accounts of Browne Irrigation Systems

Price: $3.99


P4-35B
Preparing a classified balance sheet in report form, and using the current and debt ratios to evaluate a company [30–40 min]

Selected accounts of Browne Irrigation Systems at December 31, 2012, follow:

Insurance expense 900
Note payable, long-term 2,800
Other assets 2,200
Building 55,800

so on ....

Requirements

1. Prepare the company’s classified balance sheet in report form at December 31, 2012.

2. Compute the company’s current ratio and debt ratio at December 31, 2012. At December 31, 2011, the current ratio was 1.83 and the debt ratio was 0.39. Did the company’s ability to pay debts improve or deteriorate, or did it remain the same during 2012?