- Presented below is the adjusted trial balance of Al Marai Company as on December 31st, 2020.
| Account title | Amount(Debit) | Amount(Credit) |
| Cash | 11,000 | – |
| Accounts Receivable | 21,500 | – |
| Inventory as on 1st January 2020 | 5,000 | – |
| Prepaid Insurance | 2,500 | – |
| Printing Equipment | 60,000 | – |
| Accumulated Depreciation | – | 35,000 |
| Accounts Payable | – | 5,000 |
| Interest Payable | – | 150 |
| Notes Payable | – | 5,000 |
| Commission revenue | – | 5,600 |
| Salaries payable | – | 1,300 |
| Common Stock | – | 10,000 |
| Retained earnings | – | 3,500 |
| Advertising Revenue | – | 61,500 |
| Salaries Expenses | 11,300 | – |
| Insurance expense | 850 | – |
| Interest expense | 500 | – |
| Bad debts expense | 7,000 | – |
| Purchases | 3,400 | – |
| Rent Expense | 4,000 | – |
| Total | 127,050 | 127,050 |
You are required to Prepare an Income Statement, Statement of Retained Earnings and an unclassified Balance Sheet as on December 31, 2020 with the following adjustments.
Adjustments:
- Inventory as on 31st December was valued at SR 3, 000.
- Current year depreciation on Equipment was SR 7,000.
- Commission received SR 3,000 for the next year.
- Accounts receivable includes SR 1,500 as a bad debts amount.
Solution:
Income Statement as on 31st December 2020
Retained Earnings Statement
Balance sheet as on 31st December, 2020
| Liabilities& Owners Equity | Amount | Assets | Amount |
