Homework SourseMissing Amounts From Financial Statements The financial stat
Missing Amounts From Financial Statements
The financial statements at the end of Paradise Realty\'s first month of operations are shown below.
Instructions:
1. Would you classify a realty business such as Paradise Realty as a manufacturing, merchandising, or service business?
2. By analyzing the interrelationships among the financial statements, determine the proper amounts for (a) through (o). Enter all amounts as positive numbers.
1 more Check My Work uses remaining.
| PARADISE REALTY Income Statement For the Month Ended November 30, 20Y3 | ||||
| Fees earned | $149,300 | |||
| Operating expenses: | ||||
| Wages expense | $ (a) | |||
| Rent expense | 14,400 | |||
| Supplies expense | 12000 | |||
| Utilities expense | 8,100 | |||
| Miscellaneous expense | 4,950 | |||
| Total operating expenses | (69,300) | |||
| Net income | $ (b) |
Solution
Answer to Part 1.
Paradise Reality is a Service Business, as the Revenue generated during the year is Fee, which is due to Services rendered.
Answer to Part 2.
Answer a.
Total Operating Expenses = Wages Expense + Rent Expense + Supplies Expense + Utilities Expense + Miscellaneous Expense
$69,300 = (a) + $14,400 + $12,000 + $8,100 + $4,950
(a) = $29,850
Answer b.
Net Income = Fees Earned - Total Operating Expenses
(b) = $149,300 - $69,300
(b) = $80,000
Answer c.
Net Income = $80,000
(c) = $80,000
Answer d.
Total Balances, Nov. 30, 20Y3 = Total Balances, Nov. 1, 20Y3 + Issuance of Common Stock + Net Income - Dividend
$314,000 = $0 + $270,000 + $80,000 - (d)
(d) = $36,000
Answer e.
Retained Earnings Balances, Nov. 30, 20Y3 = Retained Earnings Balances, Nov. 1, 20Y3 + Net Income – Dividend
(e) = $0 + $80,000 - $36,000
(e) = $44,000
