The accounting records of Tama Co. show the following assets and liabilities as of December 31, 2018 and 2019.
Required
1. Prepare balance sheets for the business as of December 31, 2018 and 2019. Hint: Report only total equity on the and remember that total equity equals the difference between assets and liabilities.
2. Compute net income for 2019 by comparing total equity amounts for these two years and using the following information:During 2019, the owner invested $5,000 additional cash in the business and withdrew $3,000 cash for personal use.
3. Compute the December 31, 2019, debt ratio (in percent and rounded to one decimal).
