Question

Exercise 4-22

The adjusted trial balance for Pharoah Company is given below:

PHAROAH COMPANY Trial Balance August 31, 2017
		Before Adjustment				After Adjustment
		Dr.		Cr.		Dr.		Cr.
Cash		$10,160				$10,160
Accounts Receivable		8,550				9,130
Supplies		2,750				1,740
Prepaid Insurance		4,250				2,830
Equipment		16,130				16,130
Accumulated Depreciation—Equipment				$3,629				$4,829
Accounts Payable				5,160				5,160
Salaries and Wages Payable				0				1,350
Unearned Rent Revenue				2,100				1,200
Common Stock				13,650				13,650
Retained Earnings				5,470				5,470
Dividends		2,870				2,870
Service Revenue				34,880				35,460
Rent Revenue				12,620				13,520
Salaries and Wages Expense		16,750				18,100
Supplies Expense		0				1,010
Rent Expense		16,049				16,049
Insurance Expense		0				1,420
Depreciation Expense		0				1,200
		$77,509		$77,509		$80,639		$80,639

Create a Income Statement, Retained Earnings Statement, Balance Sheet

Answer 1

Income statement
Revenue:
Service revenue	$35,460
Rent revenue	$13,520
Total revenue (A)		$48,980
Expenses:
Salaries and wages	$18,100
Supplies expenses	$1,010
Rent expenses	$16,049
Insurance expenses	$1,420
Depreciation expenses	$1,200
Total Expenses (B)		$37,779
Net profit (C=A-B)		$11,201
Retained earnings statement
Opening balance		$5,470
Add: Profit during the year from above		$11,201
Less: Dividends paid		($2,870)
Closing retained earnings		$13,801
Balance sheet
Shareholders’ equity
Common stock	$13,650
Add: Retained earnings from retained earnings statement	$13,801
Total shareholders funds		$27,451
Current liabilities
Accounts payables		$5,160
Salaries and wages payable		$1,350
Unearned revenue		$1,200
Total Liabilities		$35,161
Assets:
Non-Current assets
Equipment	$16,130
Less: Accumulated dep	($4,829)	$11,301
Current assets
Cash		$10,160
Accounts receivables		$9,130
Supplies		$1,740
Prepaid insurance		$2,830
Total Assets		$35,161