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(15-20 min.) Req. 1 Carol Pet Shop Company Balance Sheet December 31, 2011 ASSETS Current: Cash Supplies Prepaid rent Total current assets Plant: Equipment Less accumulated depreciation Total assets LIABILITIES Current: Accounts payable Salary payable Unearned service revenue Total current liabilities Long-term note payable Total liabilities STOCKHOLDERS EQUITY Common stock Retained earnings Total stockholders equity Total liabilities and stockholders equity

E 4-22

$15,200 1,900 1,400 18,500 $53,000 (6,900)

46,100 $64,600

$ 4,300 100 4,900 9,300 6,000 15,300 15,100 34,200 49,300 $63,700

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(continued) Req. 2

E 4-22

Current Prior Year Year Total current assets $18,500 Current = = = Ratio Total current liabilities $9,300 1.99 1.81

The ability to pay current liabilities has improved.

Debt Ratio

Total liabilities Total assets

$15,300 $64,600

0.24

0.35

The ability to pay total liabilities has improved.