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

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

Step-by-step 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