Question - The adjusted trial balance for Callahay Company as of December 31, 2011, follows.
Debit Credit
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,000
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . 44,000
Interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0,000
Notes receivable (due in 90 days) . . . . . . . . . . . . . . . 1 60,000
Office supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Automobiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 60,000
Accumulated depreciation - Automobiles . . . . . . . . . $ 42,000
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 30,000
Accumulated depreciation - Equipment . . . . . . . . . . 1 0,000
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88,000
Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2,000
Salaries payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 ,000
Unearned fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,000
Long-term notes payable . . . . . . . . . . . . . . . . . . . . . . 1 30,000
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227,800
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,000
Fees earned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420,000
Interest earned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6,000
Depreciation expense-Automobiles . . . . . . . . . . . . 1 8,000
Depreciation expense-Equipment . . . . . . . . . . . . . . 1 0,000
Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 80,000
Wages expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,000
Office supplies expense . . . . . . . . . . . . . . . . . . . . . . . 26,000
Advertising expense . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Repairs expense - Automobiles . . . . . . . . . . . . . . . . . 1 6,800
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $998,800 $998,800
Required -
1. Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31, 2011; (b) the statement of retained earnings for the year ended December 31, 2011; and (c) the balance sheet as of December 31, 2011.
2. Calculate the profit margin for year 2011.