Question

Cromwell Corporation has the following trial balance account balances, given in no certain order, as of December 31, 2018. Using the information provided, prepare Cromwell’s annual financial statements (omit the Statement of Cash Flows)

supplies -- $865

fees earned -- $22,850

accounts receivable -- $2,580

accounts payable -- $1,945

office furniture -- $12,685

rent expense -- $12,240

retained earnings -- $3,600

cash -- $4,695

electricity expense -- $1,380

common stock -- $10,000

misc expenses -- $1,450

dividends -- $2,500

Answer 1

Answer

Income statement

   For the Year Ended 31st December, 2018

Particulars	$
Revenue:
Fees earned	22,850
Less Expenses:
Electricity expense	1,380
Misc expense	1,450
Rent expense	12,240
Net income	7,780

   Statement of Retained earnings

For the Year Ended 31st December, 2018

Particulars	$
Beginning retained earnings	3,600
Add Net income	7,780
	11,380
Less Dividend	(2,500)
Ending retained earnings	8,880

Balance sheet

As on 31st December, 2018

Assets	$	Liabilities	$
Current assets:		Current liabilities:
Cash	4,695	Account payable	1,945
Account receivables	2,580	Total current liabilities	1,945
Supplies	865	Non current liabilities:	-------'
Total current assets	8,140	Total liabilities	1,945
Non current assets:		Shareholders equity:
Office furniture	12,685	Common stock	10,000
Total non current assets	12,685	Retained earnings	8,880
		Total shareholders equity	18,880
Total Assets	20,825	Total liabilities and shareholders equity	20,825

Working note

Retained earnings is $8,880.

Misc expenses, rent expenses and rent expenses are deducted from fees earned to get a net income of $7,780.

Supplies $865 is a current asset.

The above are the detailed presentations of financial statements.

If YOU are like the answer please upvote.