In: Accounting
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.
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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 |