PROBLEM 4 DIRECTIONS From the following Adjusted Trial Balan

PROBLEM #4 DIRECTIONS: From the following Adjusted Trial Balance, prepare the Income Statement, Statement of Stockholder\'s Equity and the Classified Balance Sheet for the second month of business for the Rahman Company. Don\'t forget to calculate the earnings per share. There were 200 shares of stock. RAHMAN COMPANY ADJUSTED TRIAL BALANCE OCTOBER 31, 2017 Debits $28,000 19,000 58,000 Credits Cash Accounts Receivable Office Equipment Accum. Depr.-Off. Equip Accounts Payable Notes Payable (90 days) Mortgage Payable Contributed Capital Retained Earnings Fees Earned Depreciation Expense Rent Expense Salary Expense Miscellaneous Expense Totals $2,000 5,000 2,800 35,000 45,000 5,000 19,200 2,000 1,500 4,500 1.000 $114,000 $114,000

Solution

RAHMAN COMPANY Income Statement For the month ended October 31, 2017 Revenue: Fees Earned $ 19,200 Less: Expenses Depreciation Expense 2,000 Rent Expense 1,500 Salary Expense 4,500 Miscellaneous Expense 1,000 9,000 Net Income 10,200 RAHMAN COMPANY Statement of stockholders equity Contributed Capital Retained Earnings Total Stockholders Equity Balance, October 1 $          45,000 $       5,000 $             50,000 add: Net Income         10,200                  10,200 Balance, October 31 $          45,000 $     15,200 $             60,200 RAHMAN COMPANY Balance Sheet As at October 31, 2017 Assets Current assets Cash $      28,000 Accounts Receivable $      19,000 Total Current Assets $ 47,000 Fixed Assets: Office Equipment $      58,000 Accum. Depr.—Off. Equip. $        2,000 $ 56,000 Total Assets $      103,000 Liabilities and stockholders Equity Current liabilities Accounts Payable $        5,000 Notes Payable (90 days) $        2,800 Total Current Liabilities $    7,800 Long term liabilities Mortgage Payable $ 35,000 Total Liabilities $ 42,800 Stockholders Equity Contributed Capital $      45,000 Retained Earnings $      15,200 Total stockholders equity $ 60,200 Total liabilities and stockholders equity $      103,000