Question

The adjusted trial balance for Tybalt Construction as of December 31, 2017, follows.

TYBALT CONSTRUCTION Adjusted Trial Balance December 31, 2017
No.	Account Title	Debit				Credit
101	Cash	$	5,500
104	Short-term investments		24,000
126	Supplies		9,200
128	Prepaid insurance		8,400
167	Equipment		45,000
168	Accumulated depreciation—Equipment					$	22,500
173	Building		171,000
174	Accumulated depreciation—Building						57,000
183	Land		57,910
201	Accounts payable						17,500
203	Interest payable						2,300
208	Rent payable						3,500
210	Wages payable						3,000
213	Property taxes payable						1,100
233	Unearned professional fees						7,400
251	Long-term notes payable						68,000
301	O. Tybalt, Capital						130,100
302	O. Tybalt, Withdrawals		12,300
401	Professional fees earned						101,000
406	Rent earned						16,000
407	Dividends earned						2,100
409	Interest earned						2,300
606	Depreciation expense—Building		12,540
612	Depreciation expense—Equipment		6,750
623	Wages expense		28,000
633	Interest expense		4,100
637	Insurance expense		8,800
640	Rent expense		11,200
652	Supplies expense		7,200
682	Postage expense		3,100
683	Property taxes expense		4,700
684	Repairs expense		7,300
688	Telephone expense		3,000
690	Utilities expense		3,800
	Totals	$	433,800			$	433,800

O. Tybalt invested $5,500 cash in the business during year 2017 (the December 31, 2016, credit balance of the O. Tybalt, Capital account was $124,600). Tybalt Construction is required to make a $7,500 payment on its long-term notes payable during 2018.
  
Required:
1a. Prepare the income statement for the calendar-year 2017.
1b. Prepare the statement of owner's equity for the calendar-year 2017.
1c. Prepare the classified balance sheet at December 31, 2017.
2. Prepare the necessary closing entries at December 31, 2017.
3. Use the information in the financial statements to compute the following ratios: http://prntscr.com/mwlyno

Answer 1

1a. Income statement for the calendar-year 2017 is:

Tybalt Construction
Income Statement
For the Year Ended December 31, 2017
Particulars	Amount ($)	Amount ($)
Professional fees earned	101,000
Rent earned	16,000
Dividend earned	2,100
Interest Eraned	2,300
Revenues		121,400
Operating Expenses
Depreciation expense- building	$12,540
Depreciation expense-Equipment	6,750
Wages Expense	28,000
Interest Expense	4,100
Insurance expense	8,800
Rent Expense	11,200
Supplies Expense	7,200
Postage Expense	3,100
Property taxes expense	4,700
Repairs expense	7,300
Telephone Expense	3,000
Utilities Expense	3,800
Total Operating Expenses		100,490
Net Income		$20,910

1b. statement of owner's equity for the calendar-year 2017 is:

Tybalt Construction
Statement of Owners Capital
For the Year Ended December 31, 2017
Particulars	Amount ($)	Amount ($)
Opening Capital		130,100
Add:
Net Income	20,910
Less:
O.Tybalt Withdrawal	12,300
O.Tybalt Closing Capital December 31		138,710

1c. Balance Sheet is:

Tybalt Construction
Budgeted Balance Sheet
As of December 31'2017
Particulars	Amount ($)	Amount ($)
ASSETS
Current Assets:
Cash	5,500
Supplies	9,200
Prepaid Insurance	8,400
Short Term investments	24,000
Total Current Assets		47,100
Equipment	45,000
Less: Accumulated Depreciation	22,500	22,500
Building	171,000
Less: Accumulated Depreciation	57,000	114,000
Land		57,910
Total Assets		241,510
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities :
Current Liabilities
Accounts Payable	17,500
Interest payable	2,300
Rent payable	3,500
Wages Payable	3,000
Property taxes payable	1,100
Unearned Professional fees	7,400
Total Current Liabilities		34,800
Long term notes payable		68,000
Total Stockholders' Equity
O.Tybalt Capital	138,710
Total Stockholders' Equity		138,710
Total Liabilities and stockholders’ equity		241,510

2. Closing entries are:

	Closing Entries
Date	Particulars	L.F	Debit	Credit
			$	$
Dec-31	Professional fees earned		101,000
	Rent earned		16,000
	Dividend earned		2,100
	Interest Eraned		2,300
	Income summary			121,400
	(For income closing balances recorded)
Dec-31	Income summary		100,490
	Depreciation expense- building			$12,540
	Depreciation expense-Equipment			6,750
	Wages Expense			28,000
	Interest Expense			4,100
	Insurance expense			8,800
	Rent Expense			11,200
	Supplies Expense			7,200
	Postage Expense			3,100
	Property taxes expense			4,700
	Repairs expense			7,300
	Telephone Expense			3,000
	Utilities Expense			3,800
	(For expenses closing balances recorded)
Dec-31	Income summary		20,910
	O.Tybalt capital			20,910
	(For income summary close to capital account)
Dec-31	O.Tybalt Capital		12,300
	O.Tybalt Withdrawal			12,300
	(For withdrawal transferred to capital account)