The following information is provided for Everything Oak Inc

The following information is provided for Everything Oak, Inc. at December 31, 2017: Everything Oak, Inc. Adjusted Trial Balance December 31,2017 (in thousands of dollars) Cash Accounts Receivable Interest Receivable Short-Term Investments Prepaid Expenses Supplies Plant, Property, & Equipment Land Accounts Pavable Accrued Wages Payable Dividends Payable Interest Payable Short-Term Notes Payable Long-Term Notes Payable Common stock (S.10 par value per share) Additional Paid-In Capital Retained Earnings DebitCredit 18,000 13,500 500 10,250 100 4,000 9,750 12,850 6,700 3,300 1.250 1,500 1,800 23,675 150 12.600 17,975 $68,950 $68,950

Solution

a) Journal Entries :

b) T - Accounts :

c) Classified Balance Sheet :

d) Current Ratio =

Dec 31, 2017 = CA / CL = 46350 / 14550 = 3.19

Dec 31, 2018 = 42700 / 10550 = 4.05

The liquidity has improved on Dec 31, 2018 because during 2018 current liabilities has reduced more than current assets.

======================

date	Accounts Titles	Debit $	Credit $
1	CAsh	7600
	CS		80
	APIC		7520
	(800 CS issued @9.5)
2	Supplies	1650
	AP		1650
3	Cash	8750
	AR		8750
4	Dividend payable	1250
	Cash		1250
5	RE	750
	Divi Payable		750
6	No Entry
7	PP & Equipment	9000
	Cash		1500
	LT Note Payable		7500
8	AP	4750
	Cash		4750
9	Cash	8000
	ST Investment		8000
10	LT Note Payable	5000
	Interest Payable	400
	Cash		5400
11	Prepaid Expenses	1200
	CAsh		1200