Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

Exercise 25

The adjusted trial balance for Tybalt Construction as of December 31, 2015, follows.

O. Tybalt invested $5,000 cash in the business during year 2015 (the December 31, 2014, 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 2016.
Required
1. Prepare the income statement and the statement of owner's equity for the calendar year 2015 and the classified balance sheet at December 31, 2015.
2. Prepare the necessary closing entries at December 31, 2015.
3. Use the information in the financial statements to compute these ratios: ( a ) return on assets (total assets at December 31, 2014, was $200,000), ( b ) debt ratio, ( c ) profit margin ratio (use total revenues as the denominator), and ( d ) current ratio. Round ratios to three decimals for parts a and c, and to two decimals for parts b and d.