Question

The adjusted trial balance for Tybalt Construction as of December 31, 2017, follows.

TYBALT CONSTRUCTION Adjusted Trial Balance December 31, 2017
No.	Account Title	Debit				Credit
101	Cash	$	7,500
104	Short-term investments		23,000
126	Supplies		8,800
128	Prepaid insurance		7,700
167	Equipment		50,000
168	Accumulated depreciation—Equipment					$	25,000
173	Building		168,000
174	Accumulated depreciation—Building						56,000
183	Land		62,280
201	Accounts payable						16,500
203	Interest payable						2,000
208	Rent payable						3,200
210	Wages payable						2,000
213	Property taxes payable						1,000
233	Unearned professional fees						7,900
251	Long-term notes payable						67,500
301	O. Tybalt, Capital						131,300
302	O. Tybalt, Withdrawals		11,300
401	Professional fees earned						99,000
406	Rent earned						17,500
407	Dividends earned						2,300
409	Interest earned						2,700
606	Depreciation expense—Building		12,320
612	Depreciation expense—Equipment		7,500
623	Wages expense		28,500
633	Interest expense		3,000
637	Insurance expense		7,100
640	Rent expense		10,300
652	Supplies expense		5,200
682	Postage expense		2,100
683	Property taxes expense		4,900
684	Repairs expense		8,500
688	Telephone expense		2,600
690	Utilities expense		3,300
	Totals	$	433,900			$	433,900

O. Tybalt invested $7,500 cash in the business during year 2017 (the December 31, 2016, credit balance of the O. Tybalt, Capital account was $123,800). Tybalt Construction is required to make a $6,500 payment on its long-term notes payable during 2018.
  
Required:
1a. Prepare the income statement for the calendar-year 2017.
1b. Prepare the statement of owner's equity for the calendar-year 2017.
1c. Prepare the classified balance sheet at December 31, 2017.
2. Prepare the necessary closing entries at December 31, 2017.
3. Use the information in the financial statements to compute the following ratios:

Answer 1

Notes:

1- Current portion of Notes payable (due in 2018 is reclassified to current liabilities. and the reclassified amount reduced from long term notes payable.

2- All revenues, expenses and drawing accounts are closed at the end of period (December 31, 2017). Those journal entries are provided above.

3- Balance amount in Income summary (Net income) transferred to Capital account.