Question

Required information Problem 3-5A Preparing financial statements from the adjusted trial balance and computing profit margin LO P6, A1 (The following information applies to the questions displayed below.) The adjusted trial balance for Chiara Company as of December 31 follows. Credit $ Debit 151,400 54,000 18,800 172,000 16,000 167,000 $ 85,000 142,000 19,000 80,000 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 R. Chiara, Capital R. Chiara, withdrawals 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 90,000 35,000 21,000 34,000 150,000 295,800 47,000 524,000 32,000 26,000 18,000 191,000 48,000 32,200 34,400 60,000 28,000 $1,285,800 $1,285,800

Answer 1

524,000 32,000 556,000 Fees earned Interest earned Total revenues Less: Expenses Depreciation expense-Automobiles Depreciation expense-Equipment Salaries expense Wages expense Interest expense Office supplies expense Advertising expense Repairs expense-Automobiles Profit 26,000 18,000 191,000 48,000 32,200 34,400 60,000 28,000 437,600 118,400 Profit/Total revenues = Profit margin $118,400 / $556,000 = 0.2129 (or) 21.29%