The adjusted trial balance for Callahay Company as of December 31, 2011, follows.
| Debit | Credit |
| ||
Cash | $ 22,000 |
|
| ||
Accounts receivable | 44,000 |
|
| ||
Interest receivable | 10,000 |
|
| ||
Notes receivable (due in 90 days) | 160,000 |
|
| ||
Office supplies | 8,000 |
|
| ||
Automobiles | 160,000 |
|
| ||
Accumulated depreciation—Automobiles |
| $ 42,000 |
| ||
Equipment | 130,000 |
|
| ||
Accumulated depreciation—Equipment |
| 10,000 |
| ||
Land | 70,000 |
|
| ||
Accounts payable |
| 88,000 |
| ||
Interest payable |
| 12,000 |
| ||
Salaries payable |
| 11,000 |
| ||
Unearned fees |
| 22,000 |
| ||
Long-term notes payable |
| 130,000 |
| ||
Common stock |
| 20,000 |
| ||
Retained earnings |
| 227,800 | |||
Dividends | 38,000 |
| |||
Fees earned |
| 420,000 | |||
Interest earned |
| 16,000 | |||
Depreciation expense—Automobiles | 18,000 |
| |||
Depreciation expense—Equipment | 10,000 |
| |||
Salaries expense | 180,000 |
| |||
Wages expense | 32,000 |
| |||
Interest expense | 24,000 |
| |||
Office supplies expense | 26,000 |
| |||
Advertising expense | 50,000 |
| |||
Repairs expense—Automobiles | 16,800 |
| |||
Total | $998,800 | $998,800 | |||
Required
1. Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31, 2011; (b) the statement of retained earnings for the year ended December 31, 2011; and (c) the balance sheet as of December 31, 2011.
2. Calculate the profit margin for year 2011.
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