Chapter 1 Introduction to Accounting and Business Check Up C

Chapter 1 Introduction to Accounting and Business Check Up Corner er 1-2 Financial Statements Levart Travel Service\'s assets expenses for the year follow at and liabilities at December 31, 2018, the end of the year, and its revenue and Accounts payable Accounts receivable Cash Common stock Fees earned $90,000 12,950 63,000 3,350 31,700 $ 12,200 31,350 53,050 100,000 263,200 Land Miscellaneous expense Office expense Supplies Wages expense The retained $20,000 were paid A. Prepare B. Prepare a S20,000 were coarnings were $30,000 on January 1, 2018, the beginning of the year. During the year, dividen an income statement for the year ended December 31, 2018. re a retained earnings statement for the year ended December 31, 2018. B. C. Prepare a balance sheet as of December 31, 2018. interrelationships of these three financial statements. Solution: The income statement reports revenues and expenses for the period. The retained earnings statement connect income statement to the balance sheet. Levart Travel Service Income Statement For the Year Ended December 31, 2018 $263,200 Expenses: Wages expense.. Office expense Miscefianeous expense $131,700 63,000 12.950 Total experses. Net incom $ 55,550 Levart Travel Service Retained Earnings Statement For the Year Ended December 31, 2018 Retained earnings, January 1, 2018.... Net income $30,000 $55,550 20,000) 35,550 $65,550 Levart Travel Service Balance Sheet December 31, 2018 Assets Cash Accounts receivable… Supplies 53,050 31,350

Solution

Ans:- It\'s already mentioned in the question as -

\"The retained earnings were $30,000 on January 1, 2018, the beginning of the year\"

That is why, while preparing the statement of retained earnings for the year ended December 31, 2018 - the retained earnings as on january 1, 2018 is considered as $30,000 which is the opening balance at the beginning of the year.