Problem:
The adjusted trial balance for the year of Sneed Corporation at May 31, 2021, follows. (Click the icon to view the adjusted trial balance.) X Read the requirements. Data table Cash Requirements - 12,000 X Accounts receivable 19,100 earni Supplies 2,200 Prepaid rent 1. Prepare Sneed Corporation's 2021 single-step income statement, statement of 1,300 retained earnings, and balance sheet. Equipment 36,800 2. Sneed's lenders require that the company maintain a debt ratio no higher than Accumulated depreciation-equipment 4,400 0.50. Calculate Sneed's debt ratio at May 31, 2021, to determine whether the company is in compliance with this debt restriction. If not, suggest a way that Accounts payable 9.600 Sneed could have avoided this difficult situation. Interest payable 700 Unearned service revenue 400 Income tax payable 2,800 Note payable 18,100 Print Done Common stock 19,000 Retained earnings 5,000 Dividends 6,000 Service revenue 87,400 Depreciation expense equipment 1,900 Salary expense 40,500 Income before tax Rent expense 11,200 Interest expense 2,600 Insurance expense 4,100 Supplies expense 2,500 7,200 Income tax expense 147 400 $ 147,400