Question

Presented here are the accounts of Pembroke Bookkeeping Company for the year ended December 31, 2018: Land \( 10,000 Common Stock \) 29,000 Notes Payable 31,000 Accounts Payable 7,000 Property Tax Expense 3,100 Accounts Receivable 1,200 Dividends 28,000 Advertising Expense 12,000 Rent Expense 7,000 Building 147,400 Salaries Expense 64,000 Cash 2,800 Salaries Payable 800 Equipment 15,000 Service Revenue 192,000 Insurance Expense 1,700 Office Supplies 12,000 Interest Expense 6,600 Retained Earnings, Dec. 31, 2017 51,000 Requirements 1. Prepare Pembroke Bookkeeping Company’s income statement. 2. Prepare the statement of retained earnings. 3. Prepare the balance sheet.

Short answer

Pembroke Bookkeeping Company
Balance Sheet
December 31, 2018
Assets	Liabilities
Cash	$2,800	Accounts Payable	$7,000
Office Supplies	12,000	Notes Payable	31,000
Accounts Receivable	1,200	Salaries Payable	800
Equipment	15,000	Total Liabilities	38,800
Land	10,000	Stockholders’ Equity
Building	147,400	Common Stock	29,000
		Retained Earnings	120,600
		Total Stockholders’ Equity	149,600
Total Assets	$188,400	Total Liabilities and Stockholders’ Equity	$188,400

Step-by-step solution

Step-by-Step SolutionStep 1: Explanation on Balance Sheet

Balance sheet reports the ending balances of assets, liabilities, and owners’ equity for the particular accounting period.

Details of balance sheet

In the balance sheet, total assets equals $188,400, total liabilities equals $38,800, and total stockholders’ equity equals $149,600.