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The adjusted trial balance for Tybalt Construction as of December 31, 2019, follows. TYBALT CONSTRUCTION Adjusted...

The adjusted trial balance for Tybalt Construction as of December 31, 2019, follows.

TYBALT CONSTRUCTION
Adjusted Trial Balance
December 31, 2019
No. Account Title Debit Credit
101 Cash $ 6,000
104 Short-term investments 24,000
126 Supplies 8,300
128 Prepaid insurance 7,300
167 Equipment 50,000
168 Accumulated depreciation—Equipment $ 25,000
173 Building 177,000
174 Accumulated depreciation—Building 59,000
183 Land 53,520
201 Accounts payable 15,000
203 Interest payable 2,300
208 Rent payable 3,600
210 Wages payable 2,900
213 Property taxes payable 800
233 Unearned professional fees 7,600
244 Current portion of long term note payable 9,000
251 Long-term notes payable 63,500
307 Common stock 6,000
318 Retained earnings 126,700
319 Dividends 11,900
401 Professional fees earned 99,000
406 Rent earned 16,500
407 Dividends earned 2,500
409 Interest earned 2,900
606 Depreciation expense—Building 12,980
612 Depreciation expense—Equipment 7,500
623 Wages expense 30,500
633 Interest expense 3,900
637 Insurance expense 9,400
640 Rent expense 13,100
652 Supplies expense 6,500
682 Postage expense 2,800
683 Property taxes expense 3,800
684 Repairs expense 7,000
688 Telephone expense 3,200
690 Utilities expense 3,600
Totals $ 442,300 $ 442,300


O. Tybalt invested $6,000 cash in the business in exchange for common stock during year 2019. The December 31, 2018, credit balance of the Retained Earnings account was $126,700.  

Required:
1a. Prepare the income statement for the calendar-year 2019.
1b. Prepare the statement of retained earnings for the calendar-year 2019.
1c. Prepare the classified balance sheet at December 31, 2019.
2. Prepare the necessary closing entries at December 31, 2019.

Solutions

Expert Solution

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Tybalt Construction
Answer 1 a
Income Statement Amount $
Professional fees earned      99,000.00
Rent earned      16,500.00
Dividends earned        2,500.00
Interest Earned        2,900.00
Total Revenue 120,900.00
Less:
Depreciation expense—Building      12,980.00
Depreciation- Equipment        7,500.00
Wages Expense      30,500.00
Interest Expense        3,900.00
Insurance Expense        9,400.00
Rent Expense      13,100.00
Supplies Expense        6,500.00
Postage Expense        2,800.00
Property taxes expense        3,800.00
Repairs expense        7,000.00
Telephone expense        3,200.00
Utilities Expense        3,600.00
Total Expense 104,280.00
Net Operating Income     16,620.00
Answer 1 b
Statement of Retained Earnings
Retained Earnings- Opening Balance 126,700.00
Add: Net Income      16,620.00
Less: Dividends      11,900.00
Retained Earnings- Closing balance 131,420.00
Answer 1 c
Balance Sheet Amount $ Amount $
Assets
Current Assets
Cash        6,000.00
Short-term investments      24,000.00
Supplies        8,300.00
Prepaid Insurance        7,300.00
Total Current Assets     45,600.00
Plant Property & Equipment
Land      53,520.00
Equipment      50,000.00
Accumulated Depreciation- Equipment      25,000.00    (25,000.00)
Building 177,000.00
Accumulated Depreciation- Building      59,000.00 118,000.00
Total Plant Property & Equipment 146,520.00
Total Assets 192,120.00
Liabilities & Stockholder's Equity Amount $ Amount $
Liabilities
Current Liabilities
Accounts Payable      15,000.00
Interest payable        2,300.00
Rent payable        3,600.00
Wages payable        2,900.00
Property taxes payable           800.00
Unearned professional fees        7,600.00
Current portion of long term note payable        9,000.00
Total Current Liabilities     41,200.00
Non Current Liabilities
Long-term notes payable      63,500.00
Total Liabilities 104,700.00
Stockholder's Equity
Common Stock        6,000.00
Retained Earnings 131,420.00
Total Stockholder's Equity 137,420.00
Total Liabilities & Stockholder's Equity 242,120.00
Answer 2
Closing entries
In closing entries all income and expense are closed to Income Summary account. Then Income Summary account is closed to Retained Earnings account.
Entry 1
Account Debit $ Credit $
Professional fees earned      99,000.00
Rent earned      16,500.00
Dividends earned        2,500.00
Interest Earned        2,900.00
Income Summary 120,900.00
Entry 2
Income Summary 104,280.00
Depreciation expense—Building      12,980.00
Depreciation- Equipment        7,500.00
Wages Expense      30,500.00
Interest Expense        3,900.00
Insurance Expense        9,400.00
Rent Expense      13,100.00
Supplies Expense        6,500.00
Postage Expense        2,800.00
Property taxes expense        3,800.00
Repairs expense        7,000.00
Telephone expense        3,200.00
Utilities Expense        3,600.00
Entry 3
Income Summary      16,620.00 This is $ 120,900 less $ 104,280.
Retained Earnings      16,620.00
Entry 4
Retained Earnings      11,900.00
Dividends      11,900.00

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