Calculate the Debt Ratio Using the Following Trial Balance of Harmony

question 33

Essay

Calculate the debt ratio using the following trial balance of Harmony Instruments,Inc.as of December 31,2017.
Hamony lnstruments, lnc.
Trial Balance
December 31,2017 $\begin{array}{ll}\text { Account Title } & \text { Debit } &\text { Credit }\\\text { Cash } & \$ 88,800 \\\text { Accounts Receivable } & 5,000 \\\text { Office Supplies } & 3,400 \\\text { Equipment } & 2,000 \\\text { Building } & 16,500 \\\text { Land } & 70,000\\\text { Accounts Payable } & & \$ 15,000 \\\text { Notes Payable } & & 60,000 \\\text { Common Stock } & & 50,000 \\\text { Dividends } & 1,200 & \\\text { Service Revenue } & & 72,000\\\text { Utilities Expense } & 4,100 & \\\text { Salaries Expense } & 4,000 & \\\text { Advertising Expense } & \underline{2,000} &\underline{\quad\quad} \\\text { Total } & \$ 197,000 & \$ 197,000\end{array}$

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Definitions:

Incidental Beneficiary

A third party who may benefit from a contract despite not being a direct party to it but has no legal rights to enforce the contract.

Breach of Contract

An act of failing to fulfill the terms of a contract between two or more parties.

Property

Assets or possessions that can be owned or controlled by an individual, corporation, or government, including tangible and intangible items.

Restaurant

A business establishment where meals or refreshments may be purchased.