(Learning Objective 4, 6: Preparing a classified balance sheet and using the ratios)
1. Use the Cookie Lapp eTravel data in Problem 3-70B to prepare the company’s classified balance sheet in report form at December 31, 20X5. Label total assets, total liabilities, and stockholders’ equity.
2. Compute Cookie Lapp’s current ratio and debt ratio at December 31, 20X5. At December 31, 20X4, the current ratio was 1.50 and the debt ratio was 0.45. Did Lapp’s ability to pay both current and total liabilities improve or deteriorate during 20X5?