The adjusted trial balance for Tybalt Construction as of December 31, 2017, follows: Tybalt Construction
Adjusted Trial Balance
December 31, 2017
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 2017 (the December 31, 2016, 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 2018.
Required
1. Prepare the income statement and the statement of owner's equity for the calendar year 2017 and the classified balance sheet at December 31, 2017.
2. Prepare the necessary closing entries at December 31, 2017.
3. Use the information in the financial statements to compute these ratios: (a) return on assets (total assets at December 31, 2016, was $200,000), (b) debt ratio, (c) profit margin ratio (use total revenues as the denominator), and (d) current ratio.