O. Tybalt invested $5,500 cash in the business during year 2017 (the December 31, 2016, credit balance of the O. Tybalt, Capital account was $123,000).
O. Tybalt invested $5,500 cash in the business during year 2017 (the December 31, 2016, credit balance of the O. Tybalt, Capital account was $123,000). 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 owner's equity 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:
Credit $ Debit 5,500 24,000 9, 200 7,800 55,000 $ 27, 500 156, 000 52, 000 58, 610 TYBALT CONSTRUCTION Adjusted Trial Balance December 31, 2017 No. Account Title 101 Cash 104 Short-term investments 126 Supplies 128 Prepaid insurance 167 Equipment 168 Accumulated depreciation-Equipment 173 Building 174 Accumulated depreciation-Building 183 Land 201 Accounts payable 203 Interest payable 208 Rent payable 210 Tages payable 213 Property taxes payable 233 Unearned professional fees 251 Long-term notes payable 301 0. Tybalt, Capital 302 0. Tybalt. Withdrawals 401 Professional fees earned 406 Rent earned 407 Dividends earned 409 Interest earned 606 Depreciation expense-Building 612 Depreciation expense-Equipment 623 Tages expense 633 Interest expense 637 Insurance expense 640 Rent expense 652 Supplies expense 682 Postage expense 683 Property taxes expense 684 Repairs expense 688 Telephone expense 690 Utilities expense Totals 16,500 2, 100 3, 600 2,100 1. 400 7, 800 65,000 128, 500 12, 400 99,000 17,000 2,700 2,700 11, 440 8, 250 29,000 3. 400 8,700 11,000 6,000 2, 200 4 800 7, 800 2.500 4 300 $ 427, 900 $ 427, 900 Required 1A Required 18 Required 10 Required 2 Required 3 Prepare the income statement for the calendar year 2017. TYBALT CONSTRUCTION Income Statement For Year Ended December 31, 2017 Revenues Professional fees earned $ 99,000 Rent earned 17,000 Dividends earned 2,700 Interest earned 2,700 $ 121,400 Total revenues Expenses Depreciation expense-Building Depreciation expense-Equipment Wages expense Interest expense Insurance expense Rent expense Supplies expense Postage expense Property taxes expense Repairs expense Telephone expense Utilities expense 11,440 8,250 29,000 3,400 8,700 11,000 6,000 2,200 4,800 7,800 2,500 4,300 Total expenses 99,390 22,010 Net income $ = 22,010 (a) Return on assets (total assets at December 31, 2016, was $200,000) Numerator: 1 Denominator: Return on total assets Net income 1 Average total assets Return on total assets $ 1 0 (b) Debt ratio Numerator: 1 Denominator: Debt ratio 1 Total assets Debt ratio 0 (c) Profit margin ratio (use total revenues as the denominator) Numerator: 1 Denominator: Profit margin Profit Net income 1 Total revenues margin S 22,010 1 $ 121,400 18.10 % (d) Current ratio Numerator: 1 Denominator: Current ratio Current / Current Current liabilities assets ratio 0 11 =
