Question

1. Use the information in the adjusted trial balance below to prepare (a) the income statement (IS tab) for the year ended December 31; (b) the statement of owner's eqity (SOE tab) for the year ended December 31 [Note: Crowder capital at December 31 of the prior year was $255,000]; and (c) the balance sheet (BS tab) as of December 31.

2. Compute the profit margin for the year (profit margin tab) (use total revenues as the denominator).

The adjusted trial balance for Crowder Company as of December 31 follows:

Debit Credit Cash 35,000 Accounts receiveable 50,000 Interest receivable 16,000 Notes receivable (due in 90 days) 150,000 Office supplies 16,000 Automobiles 170,000 Accumulated depreciation - automobiles 45,000 Equipment 125,000 Accumulated depreciation - equipment 25,000 Land 65,000 Accounts payable 100,000 Interest payable 18,000 Salaries payable 15,000 Unearned revenue 35,000 Long-term notes payable 120,000 Crowder, capital 255,000 Crowder, withdrawals 50,000 Fees earned 450,000 Interest earned 20,000 Depreciation expense - automobiles 37,000 Depreciation expense - equipment 24,000 Salaries expense 195,000 Interest expense 35,000 Office supplies expense 28,000 Advertising expense 60,000 Repairs expense-automobiles 27,000 Totals 1,083,000 1,083,000

Answer 1

Answer is given below

CROWDER COMPANY Income Statement for the year ended December 31 Fees earned $450,000 Interest earned $20,000 Total Revenue $470,000 Operating Expenses Salaries expense $195,000 Office Supplies $28,000 Advertising expense $60,000 Repairs expense- Automobile $27,000 Depreciation expense- Automobiles $37,000 Depreciation expense-Equipment $24,000 Interest expense $35,000 Total Operating expense $406,000 Net Income $64,000 CROWDER COMPANY Statement of Owner's Equity For the year ended December 31 Opening Balance of Capital Add: Net profit during the year $255,000 $64,000 $319,000 -$50,000 $269,000 Less :Drawings Closing balance of Owners' Equity CROWDER COMPANY BALANCE SHEET AS ON DECEMBER 31 Assets Current Assets Cash $35,000 Accounts Receivable $50,000 Interest receivable $16,000 Notes receivable $150,000 Office supplies $16,000 Total Current Assets $267,000 Fixed Assets Land $65,000 Automobiles Less: Accumulated Depreciation $170,000 -$45,000 $125,000 $125,000 -$25,000 $100,000 $290,000 $557,000 Equipment Less: Accumulated Depreciation Total Fixed Assets Total Assets Liabilities and Owner's Equity Current Liabilities Accounts payable Interest payable Salaries payable Unearned Revenue Total Current Liabilities $100,000 $18,000 $15,000 $35,000 $168,000 Long term liabilities Notes payable $120,000 Owner's Equity $269,000 Liabilities and Owner's Equity $557,000 2 Profit Margin Net profit Total Revenue $64,000 $470,000 13.6%