In: Accounting
The adjusted trial balance for Chiara Company as of December 31
follows.
Debit | Credit | |||||
Cash | $ | 157,200 | ||||
Accounts receivable | 51,500 | |||||
Interest receivable | 18,600 | |||||
Notes receivable (due in 90 days) | 171,500 | |||||
Office supplies | 16,000 | |||||
Automobiles | 168,000 | |||||
Accumulated depreciation—Automobiles | $ | 55,000 | ||||
Equipment | 140,000 | |||||
Accumulated depreciation—Equipment | 27,000 | |||||
Land | 81,000 | |||||
Accounts payable | 96,000 | |||||
Interest payable | 25,000 | |||||
Salaries payable | 26,000 | |||||
Unearned fees | 36,000 | |||||
Long-term notes payable | 154,000 | |||||
Common stock | 27,580 | |||||
Retained earnings | 248,220 | |||||
Dividends | 53,000 | |||||
Fees earned | 574,000 | |||||
Interest earned | 28,000 | |||||
Depreciation expense—Automobiles | 27,000 | |||||
Depreciation expense—Equipment | 21,500 | |||||
Salaries expense | 190,000 | |||||
Wages expense | 44,000 | |||||
Interest expense | 34,200 | |||||
Office supplies expense | 35,600 | |||||
Advertising expense | 61,500 | |||||
Repairs expense—Automobiles | 26,200 | |||||
Totals | $ | 1,296,800 | $ | 1,296,800 | ||
Required:
Use the information in the adjusted trial balance to prepare (a)
the income statement for the year ended December 31; (b) the
statement of retained earnings for the year ended December 31
[Note: Retained Earnings at December 31 of the prior
year was $248,220]; and (c) the balance sheet as of December
31.
Income statement
Revenue | ||
Fees earned | 574000 | |
Interest earned | 28000 | |
Total revenue | 602000 | |
Expense | ||
Depreciation expense—Automobiles | 27000 | |
Depreciation expense—Equipment | 21500 | |
Salaries expense | 190000 | |
wages expense | 44000 | |
Interest expense | 34200 | |
Office supplies expense | 35600 | |
Advertising expense | 61500 | |
Repairs expense—Automobiles | 26200 | |
Total expense | 440000 | |
Net income | 162000 |
Statement of retained earnings
Beginning retained earnings | 248220 |
Add: Net income | 162000 |
Less: Dividend | -53000 |
Ending retained earnings | 357220 |
Balance Sheet
Assets | |||
Current assets | |||
Cash | 157200 | ||
Account receivable | 51500 | ||
Interest receivable | 18600 | ||
Notes receivable (due in 90 days) | 171500 | ||
Office supplies | 16000 | ||
Total Current assets | 414800 | ||
Non Current assets | |||
Automobile | 168000 | ||
Less: Accumulated depreciation—Automobiles | -55000 | 113000 | |
Equipment | 140000 | ||
Less:Accumulated depreciation—Equipment | -27000 | 113000 | |
Land | 81000 | ||
Total Non Current assets | 307000 | ||
Total Assets | 721800 | ||
Liabilities and stockholder's equity | |||
Current liabilities | |||
Account payable | 96000 | ||
Interest payable | 25000 | ||
Salaries payable | 26000 | ||
Unearned fees | 36000 | ||
Total Current liabilities | 183000 | ||
Long term liabilities | |||
Long-term notes payable | 154000 | ||
Total liabilities | 337000 | ||
Stockholder;s equity | |||
Common Stock | 27580 | ||
Retained earnings | 357220 | ||
Total Stockholder's equity | 384800 | ||
Total liabilities and stockholder's equity | 721800 |