Question

Question 3: (10 Marks) Alfa Enterprise prepared the following adjusted trial balance at December 31, 2021, the end of the current fiscal year: Alfa Company Trial Balance December 31, 2020


Cash $14,600
Accounts Receivable 10,500
Merchandise Inventory Beginning 22,500
Prepaid Insurance 1,800
Supplies 1,350
Land 50,000
Building 136,500
Accumulated Depreciation—Building $50,700
Equipment 92,700
Accumulated Depreciation—Equipment 36,300
Accounts Payable 6,500
Unearned Rent 3,000
Charlie Brown, Capital 212,500
Charlie Brown, Drawing 10,000
Sales Revenue 500,000
Sales Return & Allowance 10,000
Purchases 275,000
Purchases Return & Allowance 5,000
Transportation 4,500
Salaries and Wages Expense 120,000
Advertising Expense 30,000
Utilities Expense 18,000
Repairs Expense 12,500
Miscellaneous Expense 4,050
Total $814,000 $814,000
Other information Merchandise Inventory (Ending) at December 31, 2020 valued $18,000.

Required: Prepare Income Statement. Prepare Balance Sheet.​

Answer 1

Answer:

1) Net profit as per income statement is 25100

2) Balance sheet total of assets and liabilities is 237100

Explanation:

Profit and loss account consists of the direct and indirect expenses.

Difference between the  direct expenses and direct income is gross profit.

Difference between the  indirect expenses and indirect income is Net profit.