Prepare a balance sheet from the following information. What is the net working capital and debt ratio?

Cash$ 50,000

Accounts receivable 42,700

Accounts payable 23,000

Short-term notes payable 10,500

Inventories 40,000

Gross fixed assets 1,280,000

Other current assets 5,000

Long-term debt 200,000

Common stock 490,000

Other assets 15,000

Accumulated depreciation 312,000

Retained earning?

Net working capital = $104,200

Debt ratio = 0.21

Retained earning = $397,200

Explanation:

The preparation of the balance sheet is presented below:

Assets

Current Assets

Cash$ 50,000

Accounts receivable $42,700

Inventories $40,000

Other current assets $5,000

Total current assets $137,700

Gross fixed assets 1,280,000

Less: Accumulated depreciation - $312,000

Net fixed assets $968,000

Other assets $15,000

Total assets $1,120,700

Liabilities

Current liabilities

Accounts payable $23,000

Short-term notes payable $10,500

Total current liabilities $33,500

Long-term debt 200,000

Total liabilities $233,500

Equity

Common stock 490,000

Retained earning $397,200 (Balancing figure)

Total equity $887,200

Total liabilities and owners equity $1,120,700

The computation is shown below:

Net working capital = Current assets - current liabilities

= $137,700 - $33,500

= $104,200

And, the debt ratio would be

= Total liabilities : Total assets

= $233,500 : $1,120,700

= 0.21