The adjusted trial balance for Tybalt Construction as of Dec

The adjusted trial balance for Tybalt Construction as of December 31, 2015, follows.

TYBALT CONSTRUCTION
Adjusted Trial Balance
December 31, 2015
No.   Account Title   Debit   Credit
101   Cash      $   5,000                 
104   Short-term investments         23,000                 
126   Supplies         8,100                 
128   Prepaid insurance         7,000                 
167   Equipment         40,000                 
168   Accumulated depreciation—Equipment                  $   20,000     
173   Building         150,000                 
174   Accumulated depreciation—Building                     50,000     
183   Land         55,000                 
201   Accounts payable                     16,500     
203   Interest payable                     2,500     
208   Rent payable                     3,500     
210   Wages payable                     2,500     
213   Property taxes payable                     900     
233   Unearned professional fees                     7,500     
251   Long-term notes payable                     67,000     
301   O. Tybalt, Capital                     126,400     
302   O. Tybalt, Withdrawals         13,000                 
401   Professional fees earned                     97,000     
406   Rent earned                     14,000     
407   Dividends earned                     2,000     
409   Interest earned                     2,100     
606   Depreciation expense—Building         11,000                 
612   Depreciation expense—Equipment         6,000                 
623   Wages expense         32,000                 
633   Interest expense         5,100                 
637   Insurance expense         10,000                 
640   Rent expense         13,400                 
652   Supplies expense         7,400                 
682   Postage expense         4,200                 
683   Property taxes expense         5,000                 
684   Repairs expense         8,900                 
688   Telephone expense         3,200                 
690   Utilities expense         4,600                 
      

   

    Totals      $   411,900         $   411,900     
      

   

  
O. Tybalt invested $5,000 cash in the business during year 2015 (the December 31, 2014, credit balance of the O. Tybalt, Capital account was $121,400). Tybalt Construction is required to make a $7,000 payment on its long-term notes payable during 2016.
  
Required:
1.1  
Prepare the income statement for the calendar year 2015.
      

1.2  
Prepare the statement of owner\'s equity for the calendar year 2015.
      
  

  
1.3  
Prepare the classified balance sheet at December 31, 2015.
      
  

  
2.   Prepare the necessary closing entries at December 31, 2015.
      
    Closing entries (all dated December 31, 2015):
      

  
3.  
Use the information in the financial statements to compute the following ratios:
      
  

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Solution

1.1 Income statement for the calendar year 2015 Revenues: Professional fees earned 97000 Rent earned   14000 Dividends earned 2000 Interest earned 2100 Total (A) 115100 Expenses: Depreciation expense—Building 11000 Depreciation expense—Equipment 6000 Wages expense 32000 Interest expense            5100 Insurance expense        10000 Rent expense      13400 Supplies expense   7400 Postage expense 4200 Property taxes expense 5000 Repairs expense 8900 Telephone expense 3200 Utilities expense 4600 Total (B) 110800 Net income (A)-(B) 4300 1.2 Statement of owner\'s equity: Beginning capital balance 121400 Add:Contribution to capital 5000 Net income for the year 4300 9300 Ending capital balance 130700 Less:Withdrawals 13000 Owner\'s equity 117700 1.3 Classified Balance sheet Assets Current Assets: Cash 5000 Short-term investments 23000 Supplies 8100 Prepaid insurance 7000 43100 Tangible Assets: Equipment 40000 Less: Accumulated depreciation 20000 20000 Building 150000 Less: Accumulated depreciation 50000 100000 Land 55000 175000 Total 218100 Liabilities and Owner\'s equity Current liabilities: Accounts payable 16500 Interest payable 2500 Rent payable                                3500 Wages payable 2500 Property taxes payable 900 Unearned professional fees 7500 Long-term notes payable (Payable in 2016) 7000 40400 Long-term liabilities: Long-term notes payable (67000-7000) 60000 Owner\'s equity: O.Tybalt, Capital (Refer 1.2) 130700 O. Tybalt, Withdrawals -13000 117700 Total 218100 2 Closing entries: Date Account titles and explanations Debit Credit 2015 31-Dec Professional fees earned 97000 Rent earned   14000 Dividends earned 2000 Interest earned 2100 Income summary 115100 (Closing of revenue accounts) 31-Dec Income summary 110800 Depreciation expense—Building 11000 Depreciation expense—Equipment 6000 Wages expense 32000 Interest expense            5100 Insurance expense        10000 Rent expense      13400 Supplies expense   7400 Postage expense 4200 Property taxes expense 5000 Repairs expense 8900 Telephone expense 3200 Utilities expense 4600 (Closing of expense accounts) 31-Dec Income summary 4300 O.Tybalt, Capital 4300 (Closing of income summary account)