Question

The adjusted trial balance for Chiara Company as of December 31 follows. Credit Debit $ 145,000 55,500 20,480 170,500 16,500 168,880 $ 55,888 138,600 17.000 83,000 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 Repair's expense-Automobiles Total 105,800 30,000 21.000 40, eee 148,eee 38,580 275, 220 54,000 534,000 28.000 25,000 19,000 185,000 42,000 36,600 35,000 60.500 29,800 $1,283,800 $1,283,800 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 31Note Retained Earnings at December 31 of the prior year was $275.220): and (c) the balance sheet as of December 31.

Answer 1

CHIARA COMPANY
Income Statement
For Year Ended December 31
Revenues:
Fees earned	534,000
Interest earned	28,000
Total revenues		562,000
Expenses:
Advertising expense	60,500
Depreciation expense, automobiles	25,000
Depreciation expense, equipment	19,000
Interest expense	36,600
Office supplies expense	35,000
Repairs expense, automobiles	29,800
Salaries expense	185,000
Wages expense	42,000
Total expenses		432,900
Net Income		129,100
CHIARA COMPANY
Statement of Changes in Equity
For Year Ended December 31
Retained earnings, Dec 31 prior year-end		275,220
Add: Net Income		129,100
		404,320
Less: Dividend		54,000
Retained earnings, Dec 31 current year-end		350,320
CHIARA COMPANY
Balance Sheet
December 31
Assets
Cash		145,000
Accounts Receivable		55,500
Interest receivable		20,400
Notes receivable (due in 90 days)		170,500
Office Supplies		16,500
Automobiles	168,000
Less: Accumulated Depreciation - Equipment	55,000	113,000
Equipment	138,000
Less: Accumulated Depreciation - Equipment	17,000	121,000
Land		83,000
Total Assets		724,900
Liabilities
Accounts Payable		105,000
Interest Payable		30,000
Salaries Payable		21,000
Unearned Revenue		40,000
Long-term Note Payable		148,000
Total Liabilities		344,000
Equity
Common Stock	30,580
Retained Earnings	350,320
Total Equity		380,900
Total Liabilities and Equity		724,900