Question

10:51 PM 41% ■ of 30, 2018 28,000 71,000 2,500

Answer 1

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	a. Income Statement
	Service Fee			$     714,800
	add: Rent Revenue			$        12,000
	Total Revenue			$     726,800
	Less: Operating Expenses
	Salaries Expense		$     526,000
	Rent Expense		$       48,000
	Supplies Expense		$       11,000
	Depreciation-Building		$         7,000
	Utilities Expense		$         7,300
	Repair Expense		$         2,800
	Insurance Expense		$         2,000
	Miscellaneous Expense		$         5,800
	Total Operating Expense			$     609,900
	Net Income			$     116,900
	b. Statement of Retained Earning
	Beginning Balance, Retained earning		$     293,600
	add: Net Income		$     116,900
	less: Dividends		$       12,000
	Ending Balance, Retained Earning		$     398,500
	c. Balance Sheet
	Assets
	Cash		$      28,000
	Accounts receivable		$      71,000
	Supplies		$       4,700
	Prepaid Insurance		$       2,500
	Total current assets		$    106,200
	Building	432500
	Accumulated depreciation	-44200
	Building, Net		$    388,300
	Total assets		$    494,500
	Liabilities and Equity
	Accounts payable		$      11,700
	Salaries Payable		$       2,500
	Unearned Rent		$       1,800
	Total current liabilities		$      16,000
	Total liabilities		$      16,000
	Common stock		$      80,000
	Retained earnings		$    398,500
	Total stockholders’ equity		$    478,500
	Total liabilities and equity		$    494,500
Part -2	Closing Entries:
Event	Account	Debit	Credit
1	Service Fee	$        714,800
	Rent Revenue	$          12,000
	Income Summary		$     726,800
	(to close revenue accounts)
2	Income Summary	$        609,900
	Salaries Expense		$     526,000
	Rent Expense		$       48,000
	Supplies Expense		$       11,000
	Depreciation-Building		$         7,000
	Utilities Expense		$         7,300
	Repair Expense		$         2,800
	Insurance Expense		$         2,000
	Miscellaneous Expense		$         5,800
	(to close Expense accounts)
3	Income Summary	$        116,900
	Retained Earning		$     116,900
	(to close income summary accounts)
4	Retained Earning	$          12,000
	Dividends		$       12,000
	(to close Dividends accounts)
Part -3
	Decrease in Retained Earning		$       34,000
	-Due to Dividend		$       12,000
	Hence, net Loss	34000-12000	$       22,000