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Problem 3-5A Preparing financial statements from the adjusted trial balance and computing profit margin LO P6, A1

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The adjusted trial balance for Chiara Company as of December 31 follows.

	Debit			Credit
Cash	$	30,000
Accounts receivable		52,000
Interest receivable		18,000
Notes receivable (due in 90 days)		168,000
Office supplies		16,000
Automobiles		168,000
Accumulated depreciation—Automobiles				$	50,000
Equipment		138,000
Accumulated depreciation—Equipment					18,000
Land		78,000
Accounts payable					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—Automobiles		26,000
Depreciation expense—Equipment		18,000
Salaries expense		188,000
Wages expense		40,000
Interest expense		32,000
Office supplies expense		34,000
Advertising expense		58,000
Repairs expense—Automobiles		24,800
Totals	$	1,134,800		$	1,134,800

Problem 3-5A Part 1

Required:
1(a) Prepare the income statement for the year ended December 31.
1(b) Prepare the statement of owner's equity for the year ended December 31. [Note: R. Chiara, Capital at Dec. 31 of the prior year was $255,800.]
1(c) Prepare Chiara Company's balance sheet as of December 31.
  

Answer 1