Question

The adjusted trial balance for Tybalt Construction as of December 31, 2019, follows. Credit $ Debit 6,500 23,000 8,800 7,300 50,000 $ 25,000 168,000 56,000 69,780 TYBALT CONSTRUCTION Adjusted Trial Balance December 31, 2019 No. Account Title 101 Cash 104 Short-term investments 126 Supplies 128 Prepaid insurance 167 Equipment 168 Accumulated depreciation-Equipment 173 Building 174 Accumulated depreciation-Building 183 Land 201 Accounts payable 203 Interest payable 208 Rent payable 210 Wages payable 213 Property taxes payable 233 Unearned professional fees 244 Current portion of long term note payable 251 Long-term notes payable 301 o. Tybalt, Capital 302 0. Tybalt, Withdrawals 401 Professional fees earned 406 Rent earned 407 Dividends earned 409 Interest earned 606 Depreciation expense-Building 612 Depreciation expense-Equipment 623 Wages expense 633 Interest expense 637 Insurance expense 640 Rent expense 652 Supplies expense 682 Postage expense 683 Property taxes expense 684 Repairs expense 688 Telephone expense 690 Utilities expense Totals 17,500 2,800 3,900 2,800 900 7,700 8,000 58,500 133,300 11,800 102,000 16,000 2,900 2,900 12,320 7,500 25,500 3, 100 7,100 11,200 7,200 3,900 3,300 8,800 1,600 3,500 $440,200 $ 440,200

Answer 1

1. Income statement

2. Statement of changes in equity

3. Balance sheet

4. Entries

5. Ratios

1. Income Statement For Year Ended December 31, 2019 Revenues Professional fees earned 102,000 Rent earned 16,000 Dividends earned 2,900 Interest earned 2,900 123,800 Total revenues Expenses Depreciation expense-Building Depreciation expense-Equipment Wages expense Interest expense Insurance expense Rent expense Supplies expense Postage expense Property taxes expense Repairs expense Telephone expense Utilities expense Total expenses Net income 12,320 7,500 25,500 3,100 7,100 11,200 7,200 3,900 3,300 8,800 1,600 3,500 95,020 28,780 2. Statement of owner's equity For Year Ended December 31, 2019 O. Tybalt, Capital, Dec. 31, 2018 Investments Net income 28,780 133,300A 28,780 B 162,080 A+B=C 11,800D 150,280 C-D 0. Tybalt, Withdrawals 0. Tybalt, Capital, Dec. 31, 2019 3. Classified balance sheet Balance sheet as at December 31, 2019 Assets Current Assets Cash Short-term investments Supplies Prepaid insurance 6,500 23,000 8,800 7,300 45,600A 25,000 50,000 25,000 168,000 56,000 112,000 69,780 206,780 B 252,380 A+B Total Current Assets Non Current Assets Equipment Less: Accumulated Depreciation-Equipment Building Less: Accumulated Depreciation-Building Land Total Non Current Assets Total Assets Liabilities and Equity Current Liabilities Accounts payable Interest payable Rent payable Wages payable Property taxes payable Unearned professional fees Current portion of long term note payable Total Current Liabilities Non Current Liabilities Long-term notes payable Total Liabilities Equity 0. Tybalt, Capital Total Liabilities and Equity 17,500 2,800 3,900 2,800 900 7,700 8,000 43,600C 58,500D 102,100 C+D=E 150,280F 252,380 EUF

Credit 4. Entry to close revenues Date General Journal 01 December 2019 Professional fees earned Rent earned Dividends earned Interest earned Income summary Debit 102,000 16,000 2,900 2,900 123,800 Credit Debit 95,020 5. Entry to close expense accounts Date General Journal 01 December 2019 Income summary Depreciation expense-Building Depreciation expense-Equipment Wages expense Interest expense Insurance expense Rent expense Supplies expense Postage expense Property taxes expense Repairs expense Telephone expense Utilities expense 12,320 7,500 25,500 3,100 7,100 11,200 7,200 3,900 3,300 8,800 1,600 3,500 Credit 5. Entry to close income summary Date General Journal 01 December 2019 Income summary O. Tybalt, Capital Debit 28,780 28,780 Credit 5. Entry to close withdrawal accounts Date General Journal 01 December 2019 O. Tybalt, Capital 0. Tybalt, Withdrawals Debit 11,800 11,800

6. Ratios a) Return on assets Numerator: / Denominator: = Return on total assets Net income / Average assets = Return on total assets 28,780 / 226,190 = 12.72 % Average assets = (Beginning assets +Ending assets)/2 (200,000 + 252,380)/2 226,190 b) Debt ratio Numerator: / Denominator: Total liabilities / Total Assets 102,100 / 252,380 = Debt ratio = Debt ratio 0.40 times c) Profit margin ratio Numerator: / Denominator: Net income / Total revenues 28,780 / 123,800 = Profit margin = Profit margin 23 % d) Current ratio Numerator: / Denominator: = Current ratio Current assets / Current liabilities = Current ratio 45,600/ 43,600 1.05 times