Question Details

No.	Account Title						Debit		Credit
101 	Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 		$ 6,400 
104 	Short- term investments . . . . . . . . . . . . . . . . . . . . 	10,200 
126	Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,600 
128	Prepaid insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 	800 
167 	Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18,000 
168 	Accumulated depreciation— Equipment . . . . . . .			$ 3,000 
173 	Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 	90,000 
174	Accumulated depreciation— Building . . . . . . . . . 			9,000 
183 	Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 		28,500 
201 	Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . .				2,500 
203 	Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . 				1,400 
208 	Rent payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 				200 
210 	Wages payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 			1,180 
213 	Property taxes payable . . . . . . . . . . . . . . . . . . . . . . 			2,330 
233 	Unearned professional fees . . . . . . . . . . . . . . . . . . 			650 
251 	Long- term notes payable . . . . . . . . . . . . . . . . . . . . 			  32,000
301 	J. Giovanni, Capital . . . . . . . . . . . . . . . . . . . . . . . . . 			  91,800
302 	J. Giovanni, Withdrawals . . . . . . . . . . . . . . . . . . . .	14,500
401 	Professional fees earned . . . . . . . . . . . . . . . . . . . . 			57,000 
406 	Rent earned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 				  6,600
407 	Dividends earned . . . . . . . . . . . . . . . . . . . . . . . . . . 			1,500 
409	 Interest earned . . . . . . . . . . . . . . . . . . . . . . . . . . . . 			1,120 
606	 Depreciation expense— Building . . . . . . . . . . . . . . 	2,000 
612	 Depreciation expense— Equipment . . . . . . . . . . . . 	1,000 
623	 Wages expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 	17,500 
633 	Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 	5,200 
637 	Insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . 	1,425 
640	Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 		1,800 
652	 Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . 	900 
682	 Postage expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 	310 
683 	Property taxes expense . . . . . . . . . . . . . . . . . . . . . 	3,825 
684	 Repairs expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 	 1,579
688	 Telephone expense . . . . . . . . . . . . . . . . . . . . . . . . 	   921 
690	 Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,820 
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	            $210,280	$210,280

J. Giovanni invested $30,000 cash in the business during year 2011 (the December 31, 2010, credit balance of the J. Giovanni, Capital account was $ 61,800). 

Required:
1. Prepare the income statement and the statement of owner- equity for the calendar year 2011 and the classified balance sheet at December 31, 2011. 
2. Prepare the necessary closing entries at December 31, 2011. 
3. Use the information in the financial statements to calculate these ratios: ( a) return on assets ( total assets at December 31, 2010, were $ 130,000), ( b) debt ratio, ( c) profit margin ratio ( use total revenues as the denominator), and ( d) current ratio.

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