The following is the unadjusted trial balance for Sharp Edge Ltd. At its year end December 31, 2018. company adjusts its accounts annually. $130,500 Cash $38,820 Supplies 41,910 Prepaid Insurance 12,720 Land 70,000 Building 290,000 Accumulated Depreciation - Building Furniture 57,200 Accumulated Depreciation - Furniture Accounts payable Unearned Revenue Mortgage payable - due 2026 Common shares (80,000 outstanding) Preferred shares (50,000 outstanding) Retained earnings Dividends Declared - common stock 20,000 Dividends Declared - preferred stock 10,500 Rent Revenue Salary expense 306,000 Utility expense 100,000 Repair expense 28,250 Interest Expense 7,700 Income tax expense 33,450 $1,016,550 $14,300 41,250 71,000 120,000 40,000 30,500 72,000 497,000 $1,016,550 Additional Information: 2911ng gnituba 29 Ismol - T 2 1. The insurance policy has a one year term beginning March 1, 2018. 2. The unearned revenue account balance received August 1, 2018 for 10 month's rent, starting August 1, 2018. w l odo brows lo yoo 3. A physical count of supplies at December 31, shows $1,380 on hand. 4. The building was purchased on January 1, 1999 and has an estimated life of 40 years. The company uses Straight line depreciation. 5. The furniture was purchased on July 1, 2015 and have an estimated life of 10 years. The company uses Straight line depreciation. 6. Rental revenue earned but not billed amounts to $22,500. 7. Accrued salaries as of December 31 amount to $14,800, had not been recorded. 8. The December utility bill of $2,000 has not been paid. 9. Interest on the 12 percent mortgage is paid monthly, on the first day of the following month. 10. A client paid $2,500 in December to reserve a unit for May 2019. The amount is included in the Rental Revenue. 11. Accrued income tax payable is estimated at $3,000. 12. A client paid $5,500 in December 2018 to reserve a rental unit for July 2019. Instructions: 1. Journalize the adjusting entries in the General Journal. 2. Set up T accounts in the General Ledger and post the beginning Balances from the trial balance. 3. Post to the TRANSACTIONS FROM THE General Journal to the "T" accounts. 4. Prepare an adjusted Trial Balance. 5. Prepare an income statement, Statement of Retained earnings and a classified Balance sheet (statement of financial position). 6. A friend of yours is considering investing in the company and ask you to comment on the Liquidity, Solvency and Profitability of the operation. In your analysis calculate the following: Working Capital, Current Ratio, Debt to Total assets ratio, EPS, P/E ratio and Profit Margin. Current market price of Sharp Edge Ltd outstanding common shares is $18 per share. The following is the unadjusted trial balance for Sharp Edge Ltd. At its year end December 31, 2018. company adjusts its accounts annually. $130,500 Cash $38,820 Supplies 41,910 Prepaid Insurance 12,720 Land 70,000 Building 290,000 Accumulated Depreciation - Building Furniture 57,200 Accumulated Depreciation - Furniture Accounts payable Unearned Revenue Mortgage payable - due 2026 Common shares (80,000 outstanding) Preferred shares (50,000 outstanding) Retained earnings Dividends Declared - common stock 20,000 Dividends Declared - preferred stock 10,500 Rent Revenue Salary expense 306,000 Utility expense 100,000 Repair expense 28,250 Interest Expense 7,700 Income tax expense 33,450 $1,016,550 $14,300 41,250 71,000 120,000 40,000 30,500 72,000 497,000 $1,016,550 Additional Information: 2911ng gnituba 29 Ismol - T 2 1. The insurance policy has a one year term beginning March 1, 2018. 2. The unearned revenue account balance received August 1, 2018 for 10 month's rent, starting August 1, 2018. w l odo brows lo yoo 3. A physical count of supplies at December 31, shows $1,380 on hand. 4. The building was purchased on January 1, 1999 and has an estimated life of 40 years. The company uses Straight line depreciation. 5. The furniture was purchased on July 1, 2015 and have an estimated life of 10 years. The company uses Straight line depreciation. 6. Rental revenue earned but not billed amounts to $22,500. 7. Accrued salaries as of December 31 amount to $14,800, had not been recorded. 8. The December utility bill of $2,000 has not been paid. 9. Interest on the 12 percent mortgage is paid monthly, on the first day of the following month. 10. A client paid $2,500 in December to reserve a unit for May 2019. The amount is included in the Rental Revenue. 11. Accrued income tax payable is estimated at $3,000. 12. A client paid $5,500 in December 2018 to reserve a rental unit for July 2019. Instructions: 1. Journalize the adjusting entries in the General Journal. 2. Set up T accounts in the General Ledger and post the beginning Balances from the trial balance. 3. Post to the TRANSACTIONS FROM THE General Journal to the "T" accounts. 4. Prepare an adjusted Trial Balance. 5. Prepare an income statement, Statement of Retained earnings and a classified Balance sheet (statement of financial position). 6. A friend of yours is considering investing in the company and ask you to comment on the Liquidity, Solvency and Profitability of the operation. In your analysis calculate the following: Working Capital, Current Ratio, Debt to Total assets ratio, EPS, P/E ratio and Profit Margin. Current market price of Sharp Edge Ltd outstanding common shares is $18 per share