Question

The December 31, 2017, credit balance of the Retained Earnings account was $123,600. Tybalt Construction is required to make a $8,000 payment on its long-term notes payable during 2019.

Required:
1a. Prepare the income statement for the calendar-year 2018.
1b. Prepare the statement of retained earnings for the calendar-year 2018.
1c. Prepare the classified balance sheet at December 31, 2018.
2. Prepare the necessary closing entries at December 31, 2018.
3. Use the information in the financial statements to compute the following ratios:
TYBALT CONSTRUCTION Income Statement For Year Ended December 31, 2018 Revenues Total revenues Expenses Total expenses

Answer 1

Tybalt Construction Income Statement For Year Ended December 31, 2017 Tybalt Construction Retained earnings statement For Year Ended December 31, 2017 123,600 27,000 Revenues Professional Fees Earned Rent Earned Dividends Earned Interest Earned Total Revenue $ $ $ $ 105,000.00 15,000.00 2,300.00 2,600.00 Retained earnigns, December 31, 2016 Add Net Income Sub-Total LESS:Dividends Retained earnigns, December 31, 2017 150,600 12,600 138,000 124,900 Expenses Depreciation Expense - Building Depreciation Expense - Equipment Wages Expense Interest Expense Insurance Expense Rent Expense Supplies Expense Postage Expense Property Taxes Expense Repairs Expense Telepohone Expense Utilities Expense Total Expenses Net Income 11,000 9,000 28,000 4,700 7,800 11,900 6,500 3,200 3,400 6,200 2,000 4,200 97,900 27,000

Tybalt Construction Balance Sheet December 31, 2017 5,000 24,500 8,600 7,900 $ 46,000 Assets Current Assets Cash Short-term Investments Supplies Prepaid Insurance Total Current Assets Plant assets Equipment Accumulated Depreciation - Equip Building Accumulated Depreciation. - Building Land Total Plant Assets Total Assets 30,000 $ $ $ $ 60,000 (30,000) $ 150,000 (50,000) $ 100,000 68,000 $ $ 198,000 244,000 $ $ $ Liabilities Current Liabilities Accounts Payable Interest Payabkle Rent Payable Wages Payable Property Taxes Payable Unearned Professional Fees Current Portion of Long-Term Notes Payable Total Current Liabilities Long-Term Notes Payable Total Liabilities Equity Common Stock Retained earnigns Total Liabilities and Equity 16,000 2,800 3,700 2.000 1,300 7,200 8,000 $ $ $ 1 $ 60,000 $ $ $ 41,000 60,000 101,000 $ $ $ 5,000 138,000 244,000

Part 2 General Journal Account Date Debit Credit 11 31-Dec Professional Fees Earned Rent Earned Dividends Earned Interest Earned Income Summary To close Revenue account. 105,000 15,000 2,300 2,600 124,900 97,900 31-Dec Income Summary Depreciation Expense - Building Depreciation Expense - Equipment Wages Expense Interest Expense Insurance Expense Rent Expense Supplies Expense Postage Expense Property Taxes Expense Repairs Expense Telepohone Expense Utilities Expense 11,000 9,000 28,000 4,700 7,800 11,900 6,500 3,200 3,400 6,200 2,000 4,200 To close Expense accounts. 3 31-Dec Income Summary 27,000 Retained earnigns 27,000 4 12,600 31-DecTo close Income Summary. Retained earnings Dividends To close Withdrawals Account. 12600

1) RETURN ON TOTAL ASSETS NUMERATOR DENOMINATOR ratio= NET INCOME Average total assets(244000+200000)/2 27,000 222000 12.16% 2)det ratio NUMERATOR DENOMINATOR ratio= Total liabilities total assets 101,000 244,000 0.41 3)profit margin ratio NUMERATOR DENOMINATOR ratio= NET INCOME total revenue 27,000 124,900 21.62% 4) current ratio NUMERATOR DENOMINATOR ratio= current assets current liabilties 46,000 41,000 1.12