Question

Balance Sheet The account balances of Paradise Travel Service for the year ended May 31, 20Y6, follow: Fees earned $705,555 Office expense 162,280 Miscellaneous expense 14,110 Wages expense 338,665 Accounts payable 17,640 Accounts receivable 49,390 Cash 222,485 Common stock 135,000 Land 226,000 Supplies 8,465 Cash dividends of $26,800 were paid during the year. Retained earnings as of June 1, 20Y5, were $190,000. Prepare the balance sheet as of May 31, 20Y6. When entering assets, enter them in order of liquidity. Paradise Travel Service Balance Sheet May 31, 20Y6

Answer 1

Answer:

Assets                                                      Liabilities

Current Assets                                         Acount Payable       17,640

Cash                         222,485                 Equity

Account receivable    49,390                Common Stock       135,000

Supplies                       8,465                Retained Earnings 353,700  

Total Current Assets 280,340               Total Equity             488,700

Land                          226,000

Total Assets               506,340              Toal Liab+ SE          506,340

Explanation:

RE will be calculate using the accounting equation as is quicker than calculate net income and do the RE statement

Assets = Liab + Equity

Where: Equity = Common Stock + RE

506,340 = 17,640 + 135,000 + RE

RE = 506,340 - 17,640 - 135,000 = 353,700