Prepare income statement and statement of retained earnings

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Assignment

Question I: Discuss three of the accounting principles and assumptions with examples.

Question II: Prepare the journal for each of the following transactions.

1. On June 1, Sara invested SAR 10,000 cash in her business to start operations.
2. On June 6, Sarah purchased inventory for SAR 6,000 on credit from a supplier.
3. On June 12, Sarah purchased inventory for SAR 2,000 cash from a supplier.
4. On June 15, Sarah borrowed 15,000 from a bank.
5. On June 31, Sarah paid SAR 4,000 cash to the supplier for the inventory purchased on credit earlier in the month.

Question III: Based on the following trial balance for United Co, prepare an income statement, a statement of retained earnings, and a balance sheet. The company made no additional investments in the company during the year.

United Co. Trial Balance December 31
Cash	SR 7,000
Accounts receivable	475
Supplies	2,500
Equipment	17,000
Accounts payable		SR 1220
Common stock		10,000
Retained earnings		11,155
Dividends	36,000
Revenue earned		72,000
Supplies expense	3,400
Rent expense	6,000
Wages expense	22,000
Totals	SR94,375	SR94,375

Reference no: EM133651309

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