Chapter 17, Problem S17.12SE

To determine

Balance Sheet: Balance sheet as part of financial statements is included in the annual report of a company, prepared at the end of an accounting period. It reports the assets, liabilities and stockholders’ equity as of the last day of financial year.

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. The current ratio is a useful tool for analysis of financials of a company.

Acid-test Ratio: It is a ratio used to determine a company’s ability to pay back its current liabilities using only liquid assets that are current assets except for the inventory and prepaid expenses. Also known as quick ratio, it is a part of liquidity ratios, used for the evaluation of a company’s liquidity.

To Complete: The balance sheet of T Company as of December 31, 2018.