Question

Problem 3-5A Preparing financial statements from the adjusted trial balance and computing profit margin LO P3, A1, A2

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The adjusted trial balance for Chiara Company as of December 31, 2017, follows.

	Debit			Credit
Cash	$	77,700
Accounts receivable		51,500
Interest receivable		23,000
Notes receivable (due in 90 days)		169,000
Office supplies		16,000
Automobiles		174,000
Accumulated depreciation—Automobiles				$	80,000
Equipment		148,000
Accumulated depreciation—Equipment					22,000
Land		88,000
Accounts payable					105,000
Interest payable					45,000
Salaries payable					23,000
Unearned fees					42,000
Long-term notes payable					150,000
Common stock					25,580
Retained earnings					230,220
Dividends		51,000
Fees earned					484,000
Interest earned					36,000
Depreciation expense—Automobiles		27,500
Depreciation expense—Equipment		21,500
Salaries expense		192,000
Wages expense		43,000
Interest expense		33,600
Office supplies expense		35,400
Advertising expense		62,000
Repairs expense—Automobiles		29,600
Totals	$	1,242,800		$	1,242,800

1(c) Prepare Chiara Company's balance sheet as of December 31, 2017.

Answer 1

$ 337,200 Chiara Company Balance sheet December. 31, 2017 Assets Current Assets Cash S 77,700 Accounts Receivables $ 51,500 Interest Receivables $ 23,000 Notes Receivables (due in 90 Days) $ 169,000 Office Supplies $ 16,000 Total Current Assets Property, plant and Equipment Automobiles $ 174,000 Less: Accumulated Depreciation- Automobiles $ 80.000 Equipment $ 148,000 Less: Accumulated Depreciation- Equipment $ 22,000 Land Total Assets Liabilities and stockholders' Equity Current Liabilities Accounts payable $ 105,000 Interest Payable $ 45,000 $ 94.000 S 126,000 $ 88,000 $ 645,200

S 23.000 $ 42.000 $ 215,000 S 150.000 Salaries Payable Unearned Fees Total Current Liabilities Long Term Borrowings Long term notes payable Total Liabilities Stockholders' equity Common stock Retained Earnings Total stockholders' Equity Total Liabilities and Stockholders' Equity S 365,000 $ 25,580 $ 254.620 $ 280,200 $ 645,200 Working Notes: Chiara Company Income Statement For the Year ended December 31,2017 Revenue Fees Earned $ 484.000 Interest Earned S 36,000 Total Revenue Less: Expenses Depreciation Expenses - Automobiles $ 27,500 Depreciation Expenses - Equipment $ 21,500 $ 520,000

Salaries Expenses Wages Expenses Interest Expenses Office Supplies Expenses Advertising Expenses Repairs expenses- Automobiles Total Expenses Net Income $ 192,000 $ 43,000 $ 33,600 $ 35,400 $ 62.000 $ 29,600 $ 444.600 $ 75,400 Chiara Company Statemnt of Retained earnings For the Year ended December 31,2017 Beginning balance of Retained Earnings $ 230.220 Add: Net Income $ 75,400 Less: Dividends $ 51,000 Ending balance of Retained Earnings $ 254,620