TYBALT CONSTRUCTION Adjusted Trial Balance December 31, 2015

No. Account Title

Debit

Credit

Problem 4-4A

Preparing closing entries, financial statements, and ratios

C3 A1 P2

101 Cash . . . . . . . . . . . . . . . 104 Short-term investments

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$ 5,000 23,000 8,100 7,000 40,000

$ 20,000 150,000

50,000 55,000

16,500 2,500 3,500 2,500

900 7,500 67,000 126,400

13,000

97,000

126 Supplies . . . . . . . . 128 Prepaid insurance

167 Equipment . . . . .

168 Accumulated depreciationEquipment . . . . . . . .

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173 Building . . . . . . . . . . . . . . . . . . . . . . . .

174 Accumulated depreciationBuilding

183 Land . . . . . . . . . .

201 Accounts payable

203 Interest payable .

208 Rent payable . . . .

210 Wages payable . .

213 Property taxes payable . . . . 233 Unearned professional fees

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251 Long-term notes payable

301 O. Tybalt, Capital . . . . . .

302 O. Tybalt, Withdrawals .

401 Professional fees earned .

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406 Rent earned . . . .

407 Dividends earned

409 Interest earned . .

606 Depreciation expenseBuilding

612 Depreciation expenseEquipment . .

14,000 2,000 2,100

623 Wages expense . . 633 Interest expense . . 637 Insurance expense 640 Rent expense . . . . 652 Supplies expense .

682 Postage expense . .

683 Property taxes expense

11,000 6,000 32,000 5,100 10,000 13,400 7,400 4,200 5,000 8,900 3,200 4,600 $411,900

684 Repairs expense . . . 688 Telephone expense 690 Utilities expense . . .

Totals . . . . . . . . . . .

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$411,900

O. Tybalt invested $5,000 cash in the business during year 2015 (the December 31, 2014, credit balance of the O. Tybalt, Capital account was $121,400). Tybalt Construction is required to make a $7,000 pay- ment on its long-term notes payable during 2016.

Required

1. Prepare the income statement and the statement of owners equity for the calendar year 2015 and the classified balance sheet at December 31, 2015.

2. Prepare the necessary closing entries at December 31, 2015.

3. Use the information in the financial statements to compute these ratios: (a) return on assets (total as-

sets at December 31, 2014, was $200,000), (b) debt ratio, (c) profit margin ratio (use total revenues as the denominator), and (d) current ratio. Round ratios to three decimals for parts a and c, and to two decimals for parts b and d.