Question

Preparing closing entries, financial statements, and ratios The adjusted trial balance for Tybalt Construction as of December 31, 2015. follows. TYLALT CONSTRUCTION Austed Trial Balance December 31, 2015 Account Tide Debit Credit 101 $ 104 5.000 126 Cash Short-term investments .. Supplies .. Prepaid insurance ... Equipment Accumulated depreciation Building Accumulated depreciation 22.000 8.100 7.000 40.000 Equip 167 168 173 174 192 $ 20,000 150.000 Building 50.000 55.000 203 16.500 2.500 2500 2500 210 7500 67.000 5.000 121,400 233 251 307 318 319 401 406 407 409 13.000 97.000 14.000 2.000 2.100 Accounts payable .. Interest payable Rent payable..... Wages payable Property taxes payable Uneamed professional fees Long-term noces payable Common stock ...... Recained earnings.. Dividends .......... Professional fees earned Rent earned ..... Dividends earned .. Interest earned Depreciation expense Building Depreciation expense-Equipmer Wages expense. Interest expense.. Insurance expense. Rent expense .. Supplies exponse. Postage expense... Property taxes expense. Repairs expense. Telephone expense. Utilities exponse.. Tocals ... 612 623 633 les 637 640 652 682 683 684 689 690 11.000 6.000 32.000 5.100 10.000 13.400 7.400 4.200 5.000 8.900 20200 4.600 $41.900 5411.900 The December 31, 2014, credit balance of the Retained Earnings account was $121,400. Tybalt Construction is required to make a $7,000 payment on its long-term notes payable during 2016,

Answer 1

1	Prepare income statement and the statement of retained earning for the calender year 2015 and the classified balance sheet at December 2015
	Tybalt constructions,
1(a)	Income statement for the YE2015
		Income	Amount	Amount
		Professional fees		97,000
		Other income
		Rent earned	14,000
		Dividends earned	2,000
		Interest earned	2,100	18,100
		Total Income		1,15,100
		Expense
		Depreciation expense - Building		11,000
		Depreciation expense - Equipment		6,000
		Wages expense		32,000
		Interest expense		5,100
		Insurance expense		10,000
		Rent expense		13,400
		supplies expense		7,400
		Postage expense		4,200
		Property taxes expense		5,000
		Repairs expense		8,900
		Telephone expense		3,200
		Utilities expense		4,600
		Total expense		1,10,800
		Net Income		4,300
	Tybalt constructions,
1(a)	Balance sheet as of 31 December, 2015
		Assets
		Property, plant and equipments
		Land		55,000
		Building	1,50,000
		Accumulated depreciation - Building	50,000	1,00,000
		Equipment	40,000
		Accumulated depreciation - Equipment	20,000	20,000
		Current assets
		Cash	5,000
		Short tem investments	23,000
		Prepaid supplies	8,100
		Prepaid insurance	7,000	43,100
		Total assets		2,18,100
		Current liabilities
		Accounts payable	16,500
		Interest payable	2,500
		Rent payable	3,500
		Wages payable	2,500
		Property taxes payable	900
		Unearned professional fees	7,500	33,400
		Long term notes payable		67,000
		Total liabilities		1,00,400
		Shareholder's fund
		Coomon stock	5,000
		Retained earning	1,12,700	1,17,700
		Total liabilities and shareholders fund		2,18,100
		Check		-
	Tybalt constructions,
1(a)	Retained earning statement for YE2015
		Opening balance		1,21,400
		Add: Profit earned during the year		4,300
		Less: Dividend paid		-13,000
		Closing balance		1,12,700
2	Prepare necessary closing entries		Debit	Credit
		Income statement - debit	4,300
		To Retained eanring credit		4,300
3	Ratio analysis
	Return on assets
		'= Net income/ Total assets
		'= 4300/218100		2.0%
	debt ratio
		'=Total liabilities / Total assets
		'= 100400/218100		46%
	profit margin ratio
		'= Net Income/Revenue
		'= 4300/115100		3.7%
	Current ratio
		'= Current assets/ Current liabilities
		=43100/33400		1.3