The adjusted trial balance for Tybalt Construction as of December 31, 2017, foll

Question

The adjusted trial balance for Tybalt Construction as of December 31, 2017, follows.

The December 31, 2016, credit balance of the Retained Earnings account was $125,100. Tybalt Construction is required to make a $6,500 payment on its long-term notes payable during 2018.

Required:
1a. Prepare the income statement for the calendar-year 2017.
1b. Prepare the statement of retained earnings for the calendar-year 2017.
1c. Prepare the classified balance sheet at December 31, 2017.
2. Prepare the necessary closing entries at December 31, 2017.
3. Use the information in the financial statements to compute the following ratios:

TYBALT CONSTRUCTION
Adjusted Trial Balance
December 31, 2017 No. Account Title Debit Credit 101 Cash $ 7,000 104 Short-term investments 23,500 126 Supplies 8,700 128 Prepaid insurance 7,500 167 Equipment 55,000 168 Accumulated depreciation—Equipment $ 27,500 173 Building 180,000 174 Accumulated depreciation—Building 60,000 183 Land 53,050 201 Accounts payable 16,000 203 Interest payable 2,700 208 Rent payable 3,000 210 Wages payable 2,800 213 Property taxes payable 1,400 233 Unearned professional fees 7,500 251 Long-term notes payable 67,000 307 Common stock 7,000 318 Retained earnings 125,100 319 Dividends 12,500 401 Professional fees earned 105,000 406 Rent earned 17,000 407 Dividends earned 2,800 409 Interest earned 2,000 606 Depreciation expense—Building 13,200 612 Depreciation expense—Equipment 8,250 623 Wages expense 25,000 633 Interest expense 5,000 637 Insurance expense 9,300 640 Rent expense 11,500 652 Supplies expense 7,300 682 Postage expense 3,000 683 Property taxes expense 3,300 684 Repairs expense 7,700 688 Telephone expense 2,600 690 Utilities expense 3,400 Totals $ 446,800 $ 446,800

Explanation / Answer

1)

2)

1c)

2)

TYBALT CONSTRUCTION
INCOME STATEMENT
for the period ended December 31, 2017 Revenue Professional fees earned 105000 Rent 17000 Dividend earned 2800 Interest earned 2000 Total revenue 126800 less:expense Depreciation expense—Building 13200 Depreciation expense—equipment 8250 wage expense 25000 Interest expense 5000 insurance expense 9300 Rent 11500 supplies expense 7300 postage expense 3000 Property taxes expense 3300 Repairs expense 7700 Telephone expense 2600 Utilities expense 3400 Total expense (99550) Net Operating income 27250

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