Chapter 3: Q5PSA_2 (page 153)
The adjusted trial balance for Chiara Company as of December 31, 2017, 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 fees 30,000
Long-term notes payable . 138,000
Common stock . 20,000
Retained earnings . 235,800
Dividends 46,000
Fees earned 484,000
Interest earned . 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
1. Use the information in the adjusted trial balance to prepare (a) the income statement for the year endedDecember 31, 2017; (b) the statement of retained earnings for the year ended December 31, 2017; and
(c) the balance sheet as of December 31, 2017.
2. Compute the profit margin for year 2017 (use total revenues as the denominator).
Short Answer
The net profit margin is 17.16%.
Step by step solution
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