QUESTION I: (CHAPTER 2)

1. 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:

1. Inventory as on 31^st December was valued at SR 3, 000.
2. Current year depreciation on Equipment was SR 7,000.
3. Commission received SR 3,000 for the next year.
4. Accounts receivable includes SR 1,500 as a bad debts amount.

Solution:

Income Statement as on 31^st December 2020

Retained Earnings Statement

Balance sheet as on 31^st December, 2020

Liabilities& Owners Equity	Amount	Assets	Amount