Question

P 3-5A The adjusted trial balance for Chiara Company as of December 31, 2015, follows.
				Debit	Credit
Cash	$30,000
AR	$52,000
Interest Receivable	$18,000
Notes Receivable (due in 90 days)	$168,000
Office Supplies	$16,000
Automobiles	$168,000
Accumulated depr-Auto		$50,000
Equipment	$138,000
Accumulated depr-Equipment		$18,000
Land	$78,000
AP		$96,000
Interest Payable		$20,000
Salaries Payable		$19,000
Unearned Fees		$30,000
Long Term notes payable		$138,000
R. Chiara Capital		$255,800
R. Chiara Withdrawals	$46,000
Fees Earned		$484,000
Interest earned		$24,000
Depreciation expense - Auto	$26,000
Depreciation expense - Equip	$18,000
Salaries Expense	$188,000
Wages expense	$40,000
Interest expense	$32,000
Office Supplies expense	$34,000
Advertisng expense	$58,000
Repair expense - auto	$24,800
Totals	$1,134,800	$1,134,800
1. Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31, 2015; (b) the statement of owner’s equity for the year ended December 31, 2015; and (c) the balance sheet as of December 31, 2015.
			Chiara Company
			Income Statement
			For Year ended December 31, 2015
			Revenues
Total revenues
Expenses
Total Expenses
Net Income
Chiara Company
Statement of Owners Equity
For Year ended December 31, 2015
Add:
Less:
Chiara Company
Balance Sheet
December 31, 2015
Assets
Liabilities
Equity

Answer 1

Income Statement, Statement of Retained earnings and balance sheet is as prepared below:

Chiara Company
Income Statement
For Year Ended December 31, 2015
Particulars	Amount ($)	Amount ($)
Fees Earned		484,000
Interest earned		24,000
Less: Expenses
Depreciation expense - Auto	26,000
Depreciation expense - Equip	18,000
Salaries Expense	188,000
Wages expense	40,000
Interest expense	32,000
Office Supplies expense	34,000
Advertisng expense	58,000
Repair expense - auto	24,800
Total expenses		420,800
Net income		87,200

Chiara Company
Statement of owners equity
For Year Ended December 31, 2015
Particulars	Amount ($)	Amount ($)
Opening capital, January 1		255,800
Add:
Addition of capital	0
Net income	87,200
Less:
Withdrawals for the year	46,000
Closing capital, December 31		297,000

Chiara Company
Budgeted Balance Sheet
As at December 31, 2015
Particulars	Amount ($)	Amount ($)
ASSETS
Current Assets:
Cash	30,000
Accounts Receivable	52,000
Interest Receivable	18,000
Notes Receivable	168,000
Office Supplies	16,000
Total Current Assets		284,000
Land		78,000
Automobiles	168,000
Accumulated dep-auto	-50,000
Equipment	138,000
Accumulated dep-equipment	-18,000	238,000
Total Assets		600,000
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities :
Current Liabilities
Accounts Payable	96,000
Interest Payable	20,000
Salaries payable	19,000
Unearned fees	30,000
Total Current Liabilities		165,000
Long term notes payable		138,000
Total Stockholders' Equity
R. Chiara Capital	297,000
Total Stockholders' Equity		297,000
Total Liabilities and stockholders’ equity		600,000