Chapter 3, Problem 4PSB

Problem 3-5B Preparing financial statements from the adjusted trial balance and computing profit margin P6 A1 The adjusted trial balance for Speedy Courier as of December 31 follows.

Debit Credit

Cash......................................... $ 58,000
Accounts receivable ............................ 120,000
Interest receivable.............................. 7,000
Notes receivable (due in 90 days} ................. 210,000
Office supplies................................. 22,000
Trucks........................................134,000
Accumulated depreciation-Trucks ................ $ 58.000
Equipment.................................... 270,000
Accumulated depreciation-Equipment............. 200,000
Land......................................... 100,000
Accounts payable .............................. 134.000
Interest payable................................ 20,000
Salaries payable ............................... 28,000
Unearned delivery fees.......................... 120,000
Long-term notes payable ........................ 200,000
L. Horace, Capital .............................. 125,000
L Horace. Withdrawals.......................... 50,000
Delivery fees earned............................ 611,8O0
Interest earned ................................ 34,000
Depreciation expense—Trucks.................... 29,000
Depreciation expense—Equipment ................ 48,000
Salaries expense............................... 74,000
Wages expense................................ 300,000
Interest expense ............................... 15,000
Office supplies expense ......................... 31,000
Advertising expense ............................ 27,200
Repairs expense—Trucks ........................ 35,600 -
_Totals......................................... $1,530,800 $1,530,800

Required

1. Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (6) the statement of owner's equity for the year ended December 31 [Note: L. Horace, Capital at Dec. 31 of year was S125_:000]; and (c) the balance sheet as of December 31.
2. Compute the profit margin for the year (use total revenues as the denominator).