The following items are taken from the adjusted trial balance of Sutch Video Productions at December 31, 2015: 
Instructions
a. Calculate the Profit.
b. Calculate the balance of Owner's Equity that would appear on a balance sheet at December 31, 2015.
c. Prepare a classified balance sheet for Sutch Company at December 31, 2015.
d. Calculate the working capital and the current ratio. Which of the two measures is preferable for comparing Sutch's liquidity with competitors'?
e. Calculate the acid-test ratio for the company. What could the company do to improve this ratio?
Definitions:
Compound Interest
Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.
Desired Rate
A specific target interest rate an entity aims to achieve in its financial activities.
Average Rate of Return
A financial ratio that represents the average annual profit of an investment compared to the initial investment cost, often used in capital budgeting to evaluate profitability.
Present Value
Present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.
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