Question

In: Accounting

The adjusted trial balance of AL Marai Company as of December 31, 2019, contains the following.                          &nbs

  1. The adjusted trial balance of AL Marai Company as of December 31, 2019, contains the following.                                                                                                         [7 Points]   

Account title

Amount(Debit)

Amount(Credit)

Cash  

19,470

-

Accounts Receivable  

6,922

-

Prepaid rent  

2,280                  

-

Equipment   

18,050                  

-

Accumulated Depreciation

-

4,895

Notes Payable

-

5,700

Accounts Payable

-

5,472

Common Stock

-

20,000

Retained Earnings

-

11,310

Dividends

3.000                      

-

Service Revenue  

11,590

Salaries Expense

6,840                        

Rent Expense  

2, 260

-

Depreciation Expense

145

-

Interest Expense

83

-

Interest Payable                                                                                          

83

Total

59,050

59,050

Instructions:

Prepare an Income Statement, Statement of Retained Earnings and Balance Sheet after taking the following adjustments.

  1. Unpaid salaries SR 2,160
  2. Accrued service revenue SR 3, 410
  3. Prepaid rent SR 260
  4. solve in microsoft word

Solutions

Expert Solution

Service revenue = Service revenue+ Accrued service revenue

= 11,590+3,410

= 15,000
Salaries expense = Salaries expense+Unpaid salaries

= 6,840+2,160

= 9,000

Rent expense unadjusted = 2,260

Prepaid rent, unadjusted = 2,280

Prepaid rent ending = 260

Prepaid rent expired = Prepaid rent, unadjusted - Prepaid rent ending

= 2,280-260

= 2,020

Rent expense (adjusted) = Rent expense unadjusted + Prepaid rent expired

= 2,260+2,020

= 4,280

Income Statement
Service revenue 15,000
Expenses:
Interest expense 83
Rent expense 4,280
Depreciation expense 145
Salaries expense 9,000
Total expenses -13,508
Net Profit 1,492
Statement of Retained Earnings
Beginning retained earnings 11,310
Add: Net profit 1,492
12,802
Less: Dividends -3,000
Retained earnings, Ending 9,802
Balance Sheet
Assets Amount
Current Assets:
Cash 19,470
Accounts receivable 6,922
Prepaid rent 260
Accrued service revenue 3,410
Total Current Assets 30,062
Plant,Assets :
Equipment 18,050
Less: Accumulated depreciation -4,895
Total plant asset 13,155
Total Assets 43,217
Liabilities and Stockholders Equity
Current Liabilities:
Accounts payable     5,472
Notes payable     5,700
Interest payable          83
Unpaid salaries     2,160
Total Current liabilities     13,415
Total liabilities     13,415
Stockholders Equity:
Common stock 20,000
Retained earnings 9,802
Total stockholders equity 29,802
Total Liabilities & Stockholders Equity 43,217

ekkarill92 answered 2 years ago
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