Question

The adjusted trial balance for Chiara Company as of December 31, 2017, follows.

	Debit			Credit
Cash	$	225,300
Accounts receivable		51,000
Interest receivable		20,000
Notes receivable (due in 90 days)		172,000
Office supplies		16,000
Automobiles		169,000
Accumulated depreciation—Automobiles				$	105,000
Equipment		146,000
Accumulated depreciation—Equipment					19,000
Land		84,000
Accounts payable					103,000
Interest payable					40,000
Salaries payable					23,000
Unearned fees					34,000
Long-term notes payable					152,000
Common stock					29,580
Retained earnings					266,220
Dividends		54,000
Fees earned					574,000
Interest earned					36,000
Depreciation expense—Automobiles		28,000
Depreciation expense—Equipment		21,500
Salaries expense		191,000
Wages expense		47,000
Interest expense		34,000
Office supplies expense		33,800
Advertising expense		64,000
Repairs expense—Automobiles		25,200
Totals	$	1,381,800		$	1,381,800

Prepare Chiara Company's balance sheet as of December 31, 2017

Answer 1

Before preparing balance sheet, we have to calculate net income for the year

Fees earned	$ 574,000
Interest earned	$    36,000
Total revenues		$ 610,000
Expenses
Depreciation expense - Automobiles	$    28,000
Depreciation expense - Equipment	$    21,500
Salaries expense	$ 191,000
Wages expense	$    47,000
Interest expense	$    34,000
Office supplies expense	$    33,800
Advertising expense	$    64,000
Repairs expense	$    25,200
Total expenses		$ 444,500
Net income		$ 165,500

CHIARA COMPANY
Balance Sheet
At December 31, 2017
Assets
Current Assets
Cash		$ 225,300
Accounts Receivables		$    51,000
Notes receivable		$ 172,000
Interest receivable		$    20,000
Office supplies		$    16,000
Total Current Assets			$ 484,300
Property, Plant and Equipments
Land		$    84,000
Automobiles	$   169,000
Accumulated depreciation—Automobiles	$ (105,000)
Automobiles - net		$    64,000
Equipment	$   146,000
Accumulated depreciation—Equipment	$   (19,000)
Equipment - net		$ 127,000
Net property, plant and equipment			$ 275,000
Total Assets			$ 759,300
Liabilities and share holder's equity
Current Liabilities
Accounts payable		$ 103,000
Interest payable		$    40,000
Salaries payable		$    23,000
Unearned fees		$    34,000
Total Current Liabilities			$ 200,000
Long-term liabilities
Long-term note payable			$ 152,000
Shareholders' equity
Common stock		$    29,580
Retained earnings ($266,220+$165,500-$54,000)		$ 377,720
Total Shareholders' equity			$ 407,300
Total liabilities and shareholders' equity			$ 759,300

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