Answer:
a.income statement for the year ended in December 31 2018
Fees earned $383,500
Less Expenses :
Miscellaneous Expense $14,500
Rent expense $22,500
Supplies expense $11,300
Utilities expense $16,700
Wages expense $170,000 ($235,000)
Net Income/(loss) $148,500
b. retained earnings statement for the year
Opening Retained Earnings $1,341,000
Add Profit for the year $148,500
Less Dividends during the year ($75,000)
Closing Retained Earnings $1,414,500
c. balance sheet as of December 31 2018
Assets
Non-Current Assets
Land $1,500,000
Total Non-Current Assets $1,500,000
Current Assets
Supplies $7,000
Accounts receivable $236,500
Cash $190,500
Total Non-Current Assets $434,000
Total Assets $1,934,000
Equity and Liabilities
Equity
Common stock $450,000
Retained Earnings $1,414,500
Total Equity $1,864,500
Liabilities
Non-Current Liabilities
Total Non-Current Liabilities
Current Liabilities
Accounts payable $69,500
Total Current Liabilities $69,500
Total Equity and Liabilities $1,934,000
d. Profits for the year.
Explanation:
The Net Income has to be calculated first.
The calculated net income is used to determine the ending retained earnings balance for the year.
The Retained Earnings Balance for the year is part of Equity in the Balance Sheet.
