Question

The adjusted trial balance for Chiara Company as of December 31 follows. Credit $ Debit 124,200 51,500 21,600 172,500 16,500 168,000 $ 55,000 146,000 17,000 86,000 Cash Accounts receivable Interest receivable Notes receivable (due in 90 days) Office supplies Automobiles Accumulated depreciation-Automobiles Equipment Accumulated depreciation-Equipment Land Accounts payable Interest payable Salaries payable Unearned fees Long-term notes payable Common stock Retained earnings Dividends Fees earned Interest earned Depreciation expense-Automobiles Depreciation expense-Equipment Salaries expense Wages expense Interest expense Office supplies expense Advertising expense Repairs expense-Automobiles Totals 92,000 30,000 19,000 38,000 142,000 30,580 275, 220 51,000 544,000 24,000 27,000 22,000 185,000 40,000 36,000 33,600 59,500 26,400 $1,266,800 $1,266,800 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 $275,220); and (c) the balance sheet as of December 31. Complete this question by entering your answers in the tabs below. Required A Required B Required Prepare the income statement for the year ended December 31.

Answer 1

$ 568,000 CHIARA COMPANY Income Statement For Year ended December 31 For year Revenue Fees Earned $ 544,000 Interest Earned $ 24,000 Total Revenue Less: Expenses Depreciation Expenses - Automobiles $ 27,000 Depreciation Expenses - Equipment $ 22,000 Salaries Expenses $ 185,000 Wages Expenses $ 40,000 Interest Expenses $ 36,000 Office Supplies Expenses $ 33,600 Advertaising Expenses $ 59,500 Repairs expenses- Automobiles $ 26,400 Total Expenses Net Income $ 429,500 $ 138,500

CHIARA COMPANY Statement of Retained Earnings For Year ended December 31 Retained earnings Dec.31 prior year Ended Add: Net Income $ 275,220 $ 138,500 $ 413,720 $ 51,000 S 362,720 Less: Dividends Retained earnings Dec.31 Current year Ended CHIARA COMPANY Balance sheet December. 31 Assets Current Assets Cash Accounts Receivables Interest Receivables Notes Receivables (due in 90 Days) Office Supplies Total Current Assets Property, plant and Equipment Automobiles Less: Accumulated Depreciation- Automobiles $ 124,200 $ 51,500 $ 21,600 $ 172,500 $ 16,500 S 386,300 $ $ 168,000 55,000 $ 113,000

$ 129,000 $ 86,000 S 714,300 Equipment $ 146,000 Less: Accumulated Depreciation- Equipment $ 17,000 Land Total Assets Liabilities and Stockholders' Equity Current Liabilities Accounts payable $ 92,000 Interest Payable $ 30,000 Salaries Payable $ 19,000 Unearned Fees $ 38,000 Total Current Liabilities $ 179,000 Long Term Borrowings Long term notes payable $ 142,000 Total Liabilities Stockholders' equity Common Stock $ 30,580 Retained Earnings $ 362,720 Total Stockholders' equity Total Liabilities and Stockholders' equity S 321,000 S 393,300 S 714,300