The adjusted trial balance for Chiara Company as of December 31 follows. Debit Credit Cash $ 30,000 Accounts receivable 52,000 Interest receivable 18,000 Notes receivable (due in 90 days) 168,000 Office supplies 16,000 Automobiles 168,000 Accumulated depreciation—Automobiles $ 50,000 Equipment 138,000 Accumulated depreciation—Equipment 18,000 Land 78,000 Accounts payable 96,000 Interest payable 20,000 Salaries payable 19,000 Unearned revenue 30,000 Long-term notes payable 138,000 Common stock 20,000 Retained earnings 235,800 Dividends 46,000 Services revenue 484,000 Interest revenue 24,000 Depreciation expense—Automobiles 26,000 Depreciation expense—Equipment 18,000 Salaries expense 188,000 Wages expense 40,000 Interest expense 32,000 Office supplies expense 34,000 Advertising expense 58,000 Repairs expense—Automobiles 24,800 Totals $ 1,134,800 $ 1,134,800 Required: Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (b) the statement of retained earnings for the year ended December 31 [Note: Retained Earnings at December 31 of the prior year was $235,800]; and (c) the balance sheet as of December 31.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 9P

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Question

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

	Debit	Credit
Cash	$ 30,000
Accounts receivable	52,000
Interest receivable	18,000
Notes receivable (due in 90 days)	168,000
Office supplies	16,000
Automobiles	168,000
Accumulated depreciation—Automobiles		$ 50,000
Equipment	138,000
Accumulated depreciation—Equipment		18,000
Land	78,000
Accounts payable		96,000
Interest payable		20,000
Salaries payable		19,000
Unearned revenue		30,000
Long-term notes payable		138,000
Common stock		20,000
Retained earnings		235,800
Dividends	46,000
Services revenue		484,000
Interest revenue		24,000
Depreciation expense—Automobiles	26,000
Depreciation expense—Equipment	18,000
Salaries expense	188,000
Wages expense	40,000
Interest expense	32,000
Office supplies expense	34,000
Advertising expense	58,000
Repairs expense—Automobiles	24,800
Totals	$ 1,134,800	$ 1,134,800

Required:

Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (b) the statement of retained earnings for the year ended December 31 [Note: Retained Earnings at December 31 of the prior year was $235,800]; and (c) the balance sheet as of December 31.

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