Presented below is the December 31 trial balance of Cassini Studios. Cassini Studios, Trial Balance, December 31, 2008. Debit Credit: Cash . $…

Presented below is the December 31 trial balance of Cassini Studios. Cassini Studios, Trial Balance, December 31, 2008.Debit Credit: Cash ……. $ 14,800, Accounts Receivable ….. 33,600, Inventory, January 1 …… 62,400, Furniture and Equipment ….. 67,200, $603,440. Notes Payable ….. 22,400, Cassini, Capital ….. 72,000, Sales …. 480,000, $603,440. (1) Prepare adjusting journal entries for the following items: (a) Adjust the Allowance for Doubtful Accounts to 8 percent of the accounts receivable. (b) Furniture and equipment is depreciated at 20 percent per year. (c) Insurance expired during the year, $2,040. (d) Interest accrued on notes payable, $2,688. (e) Sales salaries earned but not paid, $1,920. (f) Advertising paid in advance, $560. (g) Office supplies on hand, $1,200, charged to Office Expense when purchased. (2) Prepare closing entries for Cassini after the above adjusting entries have been made. Additional information shows the inventory on December 31 was $64,000. (3) Prepare a worksheet (4) Make a financial statement analysis using the following financial ratios: Ratios 2006: Current Ratio 3.95x, Acid Test Ratio 1.8x, Return on Sales 5%, Return on Total Assets 46%, Return on Equity 21%, Debt Ratio .30x.Ratios 2007: Current Ratio 4.11x, Acid Test Ratio 1.95x, Return on Sales 5%, Return on Total Assets 48%, Return on Equity 28%, Debt Ratio .26x.And write a report about the results obtained by the company in terms of liquidity or solvency, profitability (return on total assets), management efficiency, and the comparison of the ratios of the previous years. Note: 1. Use accrual-basis accounting system. 2. Use an eight-column worksheet to produce your financial statement

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