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In: Accounting

The adjusted trial balance for Chiara Company as of December 31 follows. Debit Credit Cash $...

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.

Solutions

Expert Solution

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

ekkarill92 answered 5 months ago
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