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Working Trial Balance

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Below, find a working trial balance for the Smith Company.

Smith Company

31-Dec-12

Trial Balance (accounts in alphabetical order)

Debit Credit
Accounts payable 67,000
Accounts receivable 24,500
Cash 16,700
Common stock 10,000
Depreciation expense 24,350
Cost of goods sold 234,000
Equipment (net of depreciation) 316,000
Insurance 1,400
Inventory 25,000
Long-term debt 145,000
Marketing 4,500
Paid-in capital 90,000
Property taxes 8,900
Rent 18,000
Retained earnings ???
Revenues 406,000
Salaries 67,500
Utilities 6,700

Total 747,550 718,000

Prepare an income statement and a balance sheet in good format based on the trial balance below. Calculate Financial ratios and comment on what they mean for the business.

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Solution Summary

This solution includes the preparation of the balance sheet and income statement from a trial balance, and calculates liquidity, profitability and debt ratios. An Excel file is included to provide clarity and understanding of ratio calculations.

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Liquidity Measurement Ratios Formulae
Current Ratio 0.99 Current Assets / ...

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