Answer and Explanation:
According to the scenario, The presentation are presented below:
1a. Income Statement
Particular Amount ($)
Professionals fees earned 100,000
Add - Rent earned 15,500
Add - Dividends Earned 2,000
Add - Interest earned 2,400
Total Revenue 119,900
Less - Building depreciation expenses 11,880
Less - Equipment depreciation expenses 7,500
Less - Wages expenses 28,500
Less - Interest expenses 4,800
Less - Insurance expenses 7,300
Less - Rent expenses 11,600
Less - Repair expenses 7,800
Less - Property taxes expenses 3,100
Less - supplies expenses 7,100
Less - Telephone expenses 2,100
Less - Postage expenses 3,500
Less - Utilities expenses 3,400
Net income 21,320
1 b Statement of Owner’s Equity
Particular Amount ($)
Tybalt capital on 31 Dec. 2016 126,300
Add-Additional invested cash 6,500
Add - Net income 21,320
Less - withdrawals 10,000
Tybalt capital on 31 Dec. 2017 144,120
1 c Balance Sheet
Assets Amount ($) Liabilities Amount ($)
Cash 6,500 Accounts payable 16,500
Short term
investment 22,000 Interest payable 3,000
supplies 8,000 Rent payable 3,200
Prepaid insurance 8,300 Wages payable 2,400
Equipment
($50,000-$25,000 25,000 Property taxes payable 1,200
Building
($162,000-$54,000) 108,000 Unearned professional fees 7,400
Land 68,020 Long term notes payable 68,000
Tybolt capital on 31 Dec. 2017 144,120
Total 245,820 Total 245,820
2.
Journal Entry
31, Dec. Rent earned A/c Dr. $100,000
Professional fees earned A/c Dr. $15,500
Dividends earned A/c Dr. $2,000
Interest earned A/c Dr. $2,400
To Income summary A/c $119,900
(Being the closing of revenue account is recorded)
31 Dec. Income summary A/c Dr. $98,580
To Building Depreciation expenses A/c $11,880
To Equipment Depreciation expenses A/c $7,500
To Wages expenses A/c $28,500
To Interest expenses A/c $4,800
To Insurance expenses A/c $7,300
To Rent expenses A/c $11,600
To Supplies expenses A/c $7,100
To Postage expenses A/c $3,500
To Property taxes expenses A/c $3,100
To Repairs expenses A/c $7,800
To Telephone expenses A/c $2,100
To Utilities expenses A/c $3,400
(Being the closing of expense account is recorded)
31 Dec. Income Summary A/c Dr. $21,320
To Tybalt capital A/c $21,320
(Being the closing of income summary is recorded)
31 Dec. Tybalt capital A/c Dr. $10,000
To Tybalt withdrawals A/c $10,000
(Being the closing of withdrawals account is recorded)
