Juan Real Estate Company organized as a corporation on April
Juan Real Estate Company (organized as a corporation on April 1, 2013) has completed the accounting cycle for the second year, ended March 31, 2015. Juan has also completed a correct trial balance as follows:
Required:
1. Prepare a statement of earnings for the reporting year ended March 31, 2015. Include income tax expense, assuming a 30 percent tax rate. Use the following major captions: revenues, expenses, earnings before income taxes, income tax, net earnings, and earnings per share (list each item under these captions as appropriate).
2. Prepare the journal entry to record income taxes for the year (not yet paid).
3. Prepare a statement of financial position at the end of the reporting year, March 31, 201
5. Use the following captions (list each item under these captions as appropriate):
Assets
Current assets
Non- current assets
Liabilities
Current liabilities
Non- current liabilities
Shareholders’ Equity
Contributed capital
Retained earnings
4. Compute the net profit margin ratio and the return on equity. What do these ratios suggest?
5. Prepare the closing entries at March 31, 2015.
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