Question

You are provided with the following information for Pharoah Company, effective as of its April 30, 2022 year-end. $ 846 880 Accounts payable Accounts receivable Accumulated depreciation-equipment Cash Common stock Cost of goods sold Depreciation expense Dividends Equipment Goodwill Income tax expense Income taxes payable Insurance expense Interest expense Inventory Investment in land Land Mortgage payable (long-term) 620 1,250 17,200 1,040 415 400 2,590 1,600 190 125 210 600 980 13,645 2.500 3,300

Answer 1

Preparing Income Statement:-

PHAROAH COMPANY

Income Statement

For the Year Ended April 30,2022

Accounts	Amount	Amount
Sales	$5,000
Less:- Cost of Goods Sold	(1,040)
Gross Profit		$3,960
Less:- Expenses
Depreciation Expense	$415
Insurance Expense	210
Interest Expense	600
Salaries and Wages Expense	750
Income Tax Expense	190
Total Expenses		($2,165)
Net Income		$1,795

Preparing Statement of Retained Earnings:-

PHAROAH COMPANY

Statement of Retained Earnings

For the Year Ended April 30,2022

Accounts	Amount
Retained Earnings (Beginning)	$1,500
Add:- Net Income	1,795
	$3,295
Less:- Dividends	(400)
Retained Earnings (Ending)	$2,895

Preparing Classified Balance Sheet:-

Classified Balance Sheet:- It is a financial statement in which each items are categorised in a proper way like:- Assets are categorised in Current, Long Term investment, Property Plant and Equipment and Tangible assets and Liabilities are categorised in Current and Long-term Liabilities and Stockholders Equity.

PHAROAH COMPANY

Classified Balance Sheet

As of April 30,2022

Accounts	Amount	Amount
Assets:-
Current Assets:-
Cash	$1,250
Accounts Receivable	880
Inventory	980
Prepaid Insurance	70
Stock Investments (Short-term)	1800
Total Current Assets		$4,980
Long-term Investments:-
Investments in Land	$13,645
Total Long-term Investments		$13,645
Property Plant and Equipment:-
Land	$2,500
Equipment	2,590
Less:- Accumulated Depreciation- Equipment	(620)
Total Property Plant and Equipment		$4,470
Intangible Assets:-
Goodwill	$1,600
Total Intangible Assets		$1,600
Total Assets		$24,695
Liabilities and Stockholders Equity:-
Liabilities:-
Current Liabilities:-
Accounts Payable	$846
Income Taxes Payable	125
Notes Payable (Short-term)	64
Salaries and Wages Payable	265
Total Current Liabilities		$1,300
Long-term Liabilities:-
Mortgage Payable (Long-term)	$3,300
Total Long-term Liabilities		$3,300
Stockholders Equity:-
Common Stock	$17,200
Retained Earnings (Ending)	2,895
Total Stockholders Equity		$20,095
Total Liabilities and Stockholders Equity		$24,695